EBC Corporation intends to buy additional equipment for its production. The equipment cost P 350,000. Installation and transportation costs totaled P 50,000. And the acquisition would require an additional P 30,000 working capital to support the project. a) How much is the value of the net investment? b) How much is the depreciable value of the equipment? Solutions: a) Net investment b) The depreciable value of the equipment Assuming EBC plans to replace old equipment by the one it intends to purchase in Problem 6.1 the old equipment was purchased years ago for P 250,000 and has an accumulated depreciation of P 230,000. The supplier of the new equipment is willing to grant a trade-in allowance of P P30,000. If the new equipment will not be purchased, the old equipment can be repaired at a cost of P20,000. Income tax rate is Relative to the purchase of the new equipment, additional P 40,000 working capital is required. Calculate the net investment for the new equipment