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Arlen Inc. is considering the purchase of a new machine costing P1,200,000 that would generate annual cash revenues of P2,900,000 and annual operating costs (including

Arlen Inc. is considering the purchase of a new machine costing P1,200,000 that would generate annual cash revenues of P2,900,000 and annual operating costs (including depreciation) of P2,050,000. The ,acjine would be depreciated over 5 year useful life with residual value of P100,000. The form is subject to 35% income tax rate. Compute the annual net returns from acquiring and operating the new machine.

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