Ramon Ahorro

11846948

I. IV
1 asset a
2 yes
3 capital goods
4 accounting profits
5 net present value
6 independent
7 did not exceed
8 yes
9 profitability index
10 net present value
11 return on investment b
12 yes
13 yes
14 cash budgeting
15 rejected
II
Current Current Working
Assets Liabilities Capital
5000 5000
a 22000 22000 c
b 16250 16250 a
c 35000 35000
d 20000 15000 45000 b
e 150000 150000
121250
f 3750 125000
g 52500 52500
49000
h 1000 50000

III
John Mark
Sales revenue 2525000 2712000
Cost of Sales 55% 60%
Operating Expenses 460000 580000
Depreciable assets 525000 465000
Economic Life 5 years 4 years
Each project requires P1,265,000 initial investment
The corporation's cost of capital is 8% and the income tax rate is 30%
c. John Mark
Sales 2525000 2712000
 Expenses 1848750 2207200
Depreciable assets 105000 116250
571250 388550
Tax 171375 116565
399875 271985
Depreciable assets 105000 116250
a. annual cash returns 504875 388235

initial investment 1265000

b. payback period 2.505571 years 3.258336 years

IRR
10% 2.487

9% 2.531

= 0.101364 or 10.13636 %
PV= 350000 0.746 261100
6 years 4.50%
5.63% 1 261100 11759.94 272859.944
20% tax 2 272859.9 12289.61 285149.55588
4.504 3 285149.6 12843.14 297992.69187
4 297992.7 13421.59 311414.28272
5 311414.3 14026.1 325440.38201
6 325440.4 14657.83 340098.21682

PV = 25000 3.546 7050.197

Invest 5%
1 25000 1250 26250 7050.197
2 19199.8 959.9901 20159.792724 7050.197
3 13109.6 655.4798 13765.075085 7050.197
4 6714.878 335.7439 7050.621563 7050.197

6% To be received
10000 28000 25000 53000

15000 51000 51000