A parcel of land can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P250, 000. If the net annual revenue for the first year is P22, 000 and increases by 5% per year thereafter until the tenth year. What is the equivalent uniform net annual revenue for ten years if interest per year is 8%?

A parcel of land can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P250, 000. If the net annual revenue for the first year is P22, 000 and increases by 5% per year thereafter until the tenth year. What is the equivalent uniform net annual revenue for ten years if interest per year is 8%?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 15EA: Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years....

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A parcel of land can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P250, 000. If the net annual revenue for the first year is P22, 000 and increases by 5% per year thereafter until the tenth year. What is the equivalent uniform net annual revenue for ten years if interest per year is 8%? a. P25,087 b. P26,831 c. P18,038 d. P19,987
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