Random Problems

Question 1

Dr. Walter Valdez desires to make an investment in bonds, provided she can realize 10% annually on her
investment. How much can he afford to pay for a Php 50,000 bond that pays 5% annual interest and will mature
10 years hence?

Answer 1

Php 34,638.58

Question 2

An agricultural machine is purchased for P100,000 and has a useful life of 12 years. At the end of 12 years, the
salvage value is P13,000. By straight line depreciation, what is the accumulated depreciation at the end of
8 years?

Answer 2

Php 42,000

Question 3

Edgar borrowed Php 30,000 from a local commercial bank. The loan is charged with a 16% per year simple
interest rate but the interest is to be deducted from the loan at the time the money is borrowed. At the end of one
year, Edgar has to pay Php 30,000. What is the actual rate of interest?

Answer 3

19.05%

Question 4

A firm could breakeven if it operated at 30% of its capacity. Its annual fixed costs are Php 9,000,000 and the
variable cost of its product is Php 100 per unit. The product is sold for Php 250 per unit. How much would be
the firm’s profit if it operated at full capacity

Question 5

A machine which costs Php 562,500 when new, has a lifetime of 15 years and a salvage value equal to 20% of its
original cost. If depreciated by the sum-of-the-years digits method, the depreciation charge during the 8th year
of the machine is closest to:

Answer 5

30,000

Question 6

A firm could breakeven if it operated at 30% of its capacity. Its annual fixed costs are Php 9,000,000 and the
variable cost of its product is Php 100 per unit. The product is sold for Php 250 per unit. How much would be
the firm’s profit if it operated at full capacity?

Answer 6

21 M