Gab, a businessman, has plans of going abroad and abandoning his Rent-A-Car business in Mandaluyong. He offered to sell this to a business associate, Ramil. The assets amounted to Php 7, 550, 000 but it still owes Bank of the Philippines Island (BPI) Php 1,500,000. Ramil want some answers to the following questions before he will decide to buy it: 1. Are all the assets listed still productive or usable? 2. What about the obligation to BPI? When is it due? How much interest will I pay? 3. Is the business lucrative? Is its return on investment higher that 15%? 4. What would be a reasonable price to pay for the business? You are a friend who knows something about accounting. So, you offered to help Ramil. Gab gave you the financial reports. After reviewing these, you found out that: Accounts receivable from a customer amounts to Php 20,000 and has been in the list for quite some time. Gab could not locate the customer anymore . Repair equipment listed as Php 4, 000, 000 was bought ten years ago and is now worth only half the price Two cars worth Php 3, 500, 000 are now worth only Php 2,500,000. BPI charges 5% interest to the amount of loan owed which is payable after a year. Net income averaged Php 1, 250,000 per year for the past five years. 1. After delisting the account of the customer, and reduce the values of repair equipment ad cars. The assets of Php 7,550,000 will now amounts to 2. You multiply 5% to Php 1, 500, 000 and add the charge to the amount of loan. Because of this, liabilities will be 3. The net worth of Gab's business should be 4. Using the above information, you will get the ROI of %.