Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / King of Kings Company has been renting equipment during peak season in addition to its own...

King of Kings Company has been renting equipment during peak season in addition to its own equipment in handling standard materials The rental cost averages P9000 a year The companys Investment Co

King of Kings Company has been renting equipment during peak season in addition to its own equipment in handling standard materials. The rental cost averages P9,000 a year. The company's Investment Committee is evaluating the possibility of buying additional equipment at a cost of P225,000 with an estimated useful life of 5 years and with no salvage value at the end of 5 years. The committee estimates that it can save P0.25 per unit of material by using its own equipment. Also, it estimates that 270,000 units can be handled \n each of the 5 years, A 15% discounted rate of return is considered appropriate, ignoring income tax. Present value of annuity of 1, at 15% for 5 years, is 3,352. What is the approximate number of units at which the investment can just meet the 15% return requirement? (D)
A. 232,496               C. 304,496
B. 268,496               D. 256,428 

Jun 20 2021 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions