Civil Engineering Exams (Civil Math) – Flashcard Mode

A company purchased for a cash price of P500,000 a machine which is estimated to have a salvage value of P50,000 at the end of its 10 years economic life. How much yearly deposit must the company deposit in a sinking fund that will pay 18% interest, compounded yearly, to accumulate the needed fund to purchase a new machine at the end of the 10th year economic life of the machine it purchased if a new machine will cost 75% more than by that time.