Action Company acquired an investment property with an installment price of P2,500,000. The acquisition of the

property requires a down payment of 20% and a non-interest bearing note payable at the end of each year for

five years. The prevailing rate of interest for similar instrument is 12%. The present value of an annuity of 12%

for four periods is 3.605. Action Company incurred transaction costs amounting to P45,000 for the property.

What is the cost of acquiring the property?