Solution: Determine the capital recovery rate per year of a company

A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the salvage value of the equipment after three years is P8,0000.

Determine the capital recovery rate per year of a company

Problem Statement: ME Board October 1995

A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the salvage value of the equipment after three years is P8,0000. The company’s rate of return on the money is 10%. Determine the capital recovery rate per year.

  • A. P5,115
  • B. P4,946
  • C. P5,625
  • D. P4,805

Problem Answer:

The capital recovery rate per year of a company is P5,625.

Solution:

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