Ignoring income taxes, solve the following problems independently:

1. Olivia Corporation has purchased new equipment that cost P681,960. The equipment is expected to last for four years and to provide after-tax cash inflows as follows:

Year 1 P 120,000

Year 2 240,000

Year 3 360,000

Year 4?

The investment is expected to yield a 12% rate of return, how much is the expected after-tax cash inflows in year 4? (2 pts)

2. Peru Corporation is evaluating the acquisition of equipment that will save P700,000 a year in direct labor and inventory carrying costs. This equipment costs P3,000,00 and is expected to have a 12-year life with no residual value. Management anticipates intangible benefits this equipment will provide such as greater flexibility. higher quality of output, and a positive learning experience in automation. The company s minimum return on assets is 16%. How much is the net present value of the intangible benefits? (2 pts)

3. Mexico Resorts invested P1,027,750 in an equipment. It is expected to generate cash inflows of P250,000 each year. How many years will the equipment have to be used to provide the company with a 12% return on investment? (2 pts)