The DUE lCorporation wants to purchase a new machine for its factor}.r operations at a cost of P 800,000. The investment is expected to generate
The DUE lCorporation wants to purchase a new machine for its factor}.r operations at a cost of P 800,000. The investment is expected to generate P 400,000 in annual cash ows for a period of ve vears. The required rate of return is 10%. The old machine can he sold for P T5000. The machine is expected to have zero value at the end of the vevear period. Disregard income taxes and depreciation. Compute fgr net present value of the investment. I {Refer to Present Value Table Amuitv for the annual cash ows on the other hand use the Present Value Table Ordinaryr Annuityr for the Scrap Value of the old machine}
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