A civil engineer presently receives a monthly salary of P80,000.00. His invested savings earn 14%. Ever inspired by the adage “it is better to be a head of a rat than to be a tail of a lion,” he entertained an alternative investment whereby he expected to realize a 20% return on investment and which at the same time shall comparatively assure him the enjoyment of his present perks benefits. Such alternative investment involves the procurement of various equipment and the manufacture of new construction materials. The following are the relevant yearly projected data: Total Revenue ----------------------------------------P10,000.000 Total Depreciation --- P 1,000,000.00 Raw Materials --- 3,300,000.00 Labor Costs --- 1,500,000.00 Other Expenses --- 1,200,000.00 Should he pursue the Alternative? Briefly Explain
A civil engineer presently receives a monthly salary of P80,000.00. His invested savings earn 14%. Ever inspired by the adage “it is better to be a head of a rat than to be a tail of a lion,” he entertained an alternative investment whereby he expected to realize a 20% return on investment and which at the same time shall comparatively assure him the enjoyment of his present perks benefits. Such alternative investment involves the procurement of various equipment and the manufacture of new construction materials. The following are the relevant yearly projected data: Total Revenue ----------------------------------------P10,000.000 Total Depreciation --- P 1,000,000.00 Raw Materials --- 3,300,000.00 Labor Costs --- 1,500,000.00 Other Expenses --- 1,200,000.00 Should he pursue the Alternative? Briefly Explain
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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- A civil engineer presently receives a monthly salary of P80,000.00. His invested savings earn 14%. Ever inspired by the adage “it is better to be a head of a rat than to be a tail of a lion,” he entertained an alternative investment whereby he expected to realize a 20%
return on investment and which at the same time shall comparatively assure him the enjoyment of his present perks benefits. Such alternative investment involves the procurement of various equipment and the manufacture of new construction materials. The following are the relevant yearly projected data:
Total Revenue ----------------------------------------P10,000.000
Total Depreciation --- P 1,000,000.00
Raw Materials --- 3,300,000.00
Labor Costs --- 1,500,000.00
Other Expenses --- 1,200,000.00
Should he pursue the Alternative? Briefly Explain.
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