A farrm decide whether or not to purchase a new tractor the tractor will reduce cost by P2,000 in the year P2,500 in the second and P3,000 in the third and final year of usedulness the tractor cost P9,000 today while the above cost saving will be realized at the end of each year if the interest rate is 7 percent.

What is the present value of cash inflow from purchasing the tractor?

what is the net present value of purchasing the tractor accept or reject?