The manager of Kingstown Office Supply is planning to acquire a new copier, which will cost Php500,000 and expected to last for 3 years. The new copier is expected to save the firm Php200,000 in year one, Php200,000 in the second year, and Php100,000 in the third year. After three years, the machine can be resold to a junk deaer for Php50,000. Aternatively, the manager can invest the Php500,000 at a guaranteed interest rate of 5%. To maximize profits, should the manager purchase the copier or invest the money at 5%?

Answer rating: 100% (QA)

Option 1 Year Cash PVF FlowA 5 ... View the full answer