Portage Press Company is considering replacing a machine with a book value ofP200,000,

a remaining useful life of 5 years, and annual straight-line depreciation of P40,000. The existing

machine has a current market value of P 200,000. The replacementmachine would cost P

300,000, have a 5-year life, and save P100,000 per year in cash operating costs. If the

replacement machine would be depreciated using the straight-linemethod and the tax rate is

40%, whatwould be the increase in annual net cash flow if the company replaces the machine?