Solution-Calculate the NPV under SYD depreciation

Calculate the NPV under SYD depreciation

Reference no: EM132997674

Problem - The Molding Department of the Cabuyao, Inc. has been investigating the possibility of acquiring a new unit of equipment at a cost of P120,000. Cash cost savings before income tax from the use of this equipment has been estimated at P50,000 a year for a period of 4 years. At the end of 4 years, the equipment will have no salvage value. The minimum acceptable rate is 12% discounted rate.

REQUIRED -

1. Calculate the NPV under straight-line under straight-line depreciation.

2. Calculate the NPV under SYD depreciation.

3. Explain how a bookkeeping method can help to improve the rating of a capital investment project.

Reference no: EM132997674

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Calculate the NPV under SYD depreciation

Reference no: EM132997674

Reference no: EM132997674

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