Cash necessary for the installation

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A ?rm is charged P150 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. it is desired to install a railway system which would bring down the cost of hauling to P660 per ton. Maintenance cost of this is P12,UUU per month. Tax is 1%. Average rate if earning is 20%.

a. If the company has the cash necessary for the installation, would you recommend the change?

Reference no: EM133131126

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