Question
The DFC in its campus consumes 600,000 kwh of electrical energy having a rate of Php 2.00 per kwh. A feasibility plan was conducted to
The DFC in its campus consumes 600,000 kwh of electrical energy having a rate of Php 2.00 per kwh. A feasibility plan was conducted to build a solar power plant inside the campus that will cost Php 2,000,000.00. Annual operation and maintenance will be at Php 800,000.00. Other expenses will be at Php100,000.00 per year. Life of the solar power plant is 15 years and has a salvage value of Php 200,000.00 at the end of life. Taxes and insurance will be at 6% of the first cost; and the rate of return is 15%. Using the sinking fund method for the depreciation, determine if the rate of return and if the investment is worthy.
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