Engr. Max Diego, the owner, and general manager of EngTech, an engineering firm, asked the company accountant to make a feasibility study on the possibility of acquiring a delivery truck for their operations. The study includes determining the amount of money needed to buy the delivery truck, replacing it, and the next delivery truck every four years up to twenty-four years. The truck's trade-in value at the end of four years is estimated to be P1,500,000, and the replacement is P2,900,000. The annual operating expenses, including depreciation, are estimated to be P1,250,000. The fund is to be invested at 8% and to have a balance of P2,900,000 at the end of twenty-four years estimated to be P1,250,000. The fund is to be invested at 8% and to have a balance of P2,900,000 at the end of twenty-four years. Cashflow diagram is required.

Answer rating: 100% (QA)

The cash flow diagram for the EngTech company is as follows Year 0 2900000 cost of delivery truck Ye... View the full answer