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Determine the net present value of acquiring the new asset

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Question - ABM. Inc. acquired a production equipment amounting to P22,981,900. The company expected that because of the asset, the operating expense will be cut by P5,349,923 every year up to the end of its useful life. The new asset has 6 years of estimated useful life. The company also accounted that the acquired asset has 1,686,375 salvage value. Determine the net present value of acquiring the new asset if the effective interest is 10%.

Reference no: EM133059289

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