Question: SITUATION 5 Given the following data for two equipment A and B: A B First Cost P50,000 P150,000 Salvage Value P2,000 P6,000 Annual Maintenance P6,000

SITUATION 5 Given the following data for two equipment A and B: A B First Cost P50,000 P150,000 Salvage Value P2,000 P6,000 Annual Maintenance P6,000 P3,000 Economic Life` 5 15 The maximum rate of return for both equipment is 12% per annum. Use sinking fund method of depreciation. 37. Determine the annual cost of A. a. P23,878 c. P21,456 b. P19,556 d. P18,456 38. Determine the present worth of B. a. P176,389 c. P189,345 b. P2123,783 d. P169,336 39. What is the rate of return for the additional initial investment on equipment B? a. 6.69% c. 10.23% b. 8.65% d. 12.89%

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