Math Problem Solver

Alexisis considering establishing his own small company. An investment of P500,000 will be required which will be recovered in 14years. It is estimated that sales will be P850,000 per year and that operating expenses will be as follows. Materials P165,000 per year Labor P280,000 per year Overhead P40,000 +12% of sales per year Selling expense P60,000 Alexiswill give his regular job paying P220,000 per year and devote full time to the operation of the business; this will result in decreasing labor cost by P45,000 per year, material cost by P25,000 per year and overhead cost by P30,000 per year If the man expects to earn at least 20% of his capital, should he invest?

aUse the Rate of Return Method b.Use the Present Worth Method c.UsetheFuture Worth Method d.Use the Annual Worth Method