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1) The year end operating and maintenance costs of certain machine are estimated to be P12,000 the first year and to increase P2,500 each year during its 4-yr life

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1) The year end operating and maintenance costs of certain machine are estimated to be P12,000 the first year and to increase P2,500 each year during its 4-yr life. If capital is worth 12%. What is the equivalent uniform year end costs?

Select one:

a. P15,397.13

b. P15,690.00

c. P14,600.00

d. P16,800.00

2) A machine shop install new lathe machine that costs of P1,800,000. The machine shop expects annual gross revenue to increase P500,000 while it incurs an annual expense of P50,000 for the machine operations and maintenance. What is the payback period?

Select one:

a. 2 years

b. 3 years

c. 4 years

d. 5 years