1. Fermin Printers, Inc. is planning to replace its present printing equipment with a more efficient unit. The new equipment will cost P 400,000, with a five-year useful life, no salvage value. The old unit was acquired three years ago for P 500,000. The company uses the straight-line method in depreciating its depreciable assets. The old unit is being depreciated at P 62,500 per year. If the new equipment is acquired, the old one will be sold for P 100,000. Otherwise, the company will just continue using it for 5 years. Cash operating costs are P 100,000 and P 220,000 for the new and old equipments, respectively. Income tax is at the rate of 32% of income before tax. a. Required: Compute the following: Increase in annual net income as a result of acquiring new equipment b. Expected increase in annual net cash inflows if the new equipment is acquire Net cost of investment in the new equipment C