Calculate the annual cost of a project that has an initial cost of P 3,000,000 and an additional cost of P 1,000,000 at the end of every ten years. The annual operating cost will be P 100,000 at the end of every year for the first four years and P 160,000O thereafter. In addition, there is expected to be a recurring major rework cost of P 300,000 every 13 years. Assume i = 15%. O P 4,281,936 P 3,694,182 O P 592,480 O P 642,290

Calculate the annual cost of a project that has an initial cost of P 3,000,000 and an additional cost of P 1,000,000 at the end of every ten years. The annual operating cost will be P 100,000 at the end of every year for the first four years and P 160,000O thereafter. In addition, there is expected to be a recurring major rework cost of P 300,000 every 13 years. Assume i = 15%. O P 4,281,936 P 3,694,182 O P 592,480 O P 642,290

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 1P

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