Heavy Motors is taking a look at a new product line that will take a few years to create. New lab equipment would cost Php 10 million initial investment, and salaries and other expenses will total Php 15 million each year for the next four years. The new product revenues begin in year 6 and average Php 15 million per year for the rest of the study period. Is this a good venture for Heavy Motors? use a 12% MARR and a 20-year time period? Use the following method to support your recommendation (Future Worth and ERR - use Є = 12%). Compute for the future worth and ERR(i)
Heavy Motors is taking a look at a new product line that will take a few years to create. New lab equipment would cost Php 10 million initial investment, and salaries and other expenses will total Php 15 million each year for the next four years. The new product revenues begin in year 6 and average Php 15 million per year for the rest of the study period. Is this a good venture for Heavy Motors? use a 12% MARR and a 20-year time period? Use the following method to support your recommendation (Future Worth and ERR - use Є = 12%). Compute for the future worth and ERR(i)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Heavy Motors is taking a look at a new product line that will take a few years to create. New lab equipment would cost Php 10 million initial investment, and salaries and other expenses will total Php 15 million each year for the next four years. The new product revenues begin in year 6 and average Php 15 million per year for the rest of the study period. Is this a good venture for Heavy Motors? use a 12% MARR and a 20-year time period? Use the following method to support your recommendation (Future Worth and ERR - use Є = 12%). Compute for the future worth and ERR(i)
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