An existing warehouse is worth P500,000, and the average value of the goods stored is P800,000. Total insurance cost on the warehouse and inventory is P10,000 annually. If a proposed sprinkling system is installed in the warehouse, the insurance cost will be reduced to three fourths of the original cost. The cost of the sprinkler system is P20,000 and the additional annual cost for maintenance and inspection would be P500. The required write-off period for the entire investment in the sprinkler system is 20 years. The operation of the warehouse is now providing the firm a 12% return on the original investment.