An entity acquired new asset for P100,000.00. The company expected that because of the asset, net cash inflow will increase by P20,000.00 every year up to the end of its useful life. The company also accounted that the acquired asset has P15,000.00 salvage value. Determine the net present value of acquiring the new asset if the effective interest is 6 %.

An entity acquired new asset for P100,000.00. The company expected that because of the asset, net cash inflow will increase by P20,000.00 every year up to the end of its useful life. The new asset has 5 years of estimated useful life. The company also accounted that the acquired asset has P15,000.00 salvage value. Determine the net present value of acquiring the new asset if the effective interest is 6 %.