ABC Company acquired two units of equipment on December 31, 2021. The first equipment was purchased in exchange for a ten-year non-interest

bearing note requiring annual payment of P1,000,000 every December 31 starting December 31, 2022. The second equipment was acquired by issuing a

two year P 6,000,000 non-interest bearing note. The prevailing rate for notes of these types on December 31, 2021 was 12%. (Notes: Use two decimal

places for present value factor.)

QUESTION:

What is the total cost of the two units of equipment?

A. PHP 16,470.000

B. 11,130,000

C. 10,450.000

D. 10, 130,000