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A salesman offers a businessman two options for certain machine. Using the Present Value (PV)...

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Accounting

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A salesman offers a businessman two options for certain machine. Using the Present Value (PV) Method in determining the more economical, what is the Present Value of Option A? Assume interest is 23% cpd. a. Option A: First Cost - P236,692; Annual operating cost - P50,145; Salvage Value - P10,152; and Useful life - 5 years Option B: First Cost - P65,000; Annual operating cost - P20,000; Salvage Value - P2,500; and Useful life - 6 years

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