It is desired to determine the present economic value of an old machine by considering of how it compares with the best modern machine that could replace it. The old machine is expected to require out of pocket cost of P85,000each year for 4 years and then scrapped for 5,000 residual value. The new machine requires an investment of P40,000 and would have out of pocket cost of P79,000 a year for 8 years and then zero salvage value. Invested capital should earn a minimum return of 15% before taxes. Determine the present value of the old machine