Knight Company purchased an equipment for P369,600 to be used in the construction of MRT-3. The company had to pay the following in relation to the equipment:

Import duties P10,000 Non-refundable taxes 15,000 Shipping costs 2,000 Cost of testing 1,200 Installation costs 1,800

Other information:

• The company is required to dismantle the equipment at the end of its useful life. The company estimates the dismantling costs to be P50,000. The relevant discount rate is 10%.
• The equipment has a useful life of 5 years.
• How much is the initial cost of the equipment?
• The purchase price includes input vat of P39,600

How much is the initial cost of the asset?