1. A laboratory test machine costs P 150,000.00, lasts for 6 years and has a salvage value of P 30, 000.00. How much could an investor afford to pay for another machine of the same purpose, whose life is 10 years with a salvage value of P40,000.00, if money is worth 5%. Solution: 2. What is the value of an asset after 8 years of use if it depreciates from its original value of P 500,000.00 to its salvage value of 1.5% in 10 years? (Use Straight Line Method) Solution