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An old machine has a first cost of P10M and an annual operating cost of P2,117,211 and a useful life of 7 years with a
An old machine has a first cost of P10M and an annual operating cost of P2,117,211 and a useful life of 7 years with a salvage value of P1M. On its 3rd year, the company thinks of selling it at P7,953,658 and replaces it with a new machine having a cost of P7.5M and an annual operating cost of P0.4M during a 6-year life and a salvage value of P0.5M. With an interest of 22% cpd.-annualy, what is the Annual Equivalent Cost of the old Machine?
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