Wiley is considering the acquisition of a new, more efficient press. The cost of the press is P3,660,000, and the press has an estimated 6-year life with zero salvage value. Wiley uses straight-line depreciation and has a 20% corporate income tax rate. In evaluating equipment acquisitions of this type, Wiley uses a goal of a 4-year payback period.

1. To meet Whitneys desired payback period, the press must produce a minimum annual before-tax operating cash saving of __________.

2. Compute for the press breakeven cashflow if cost of capital is 10%.

Consider a project that requires initial investment of P2,570,000 with the following salvage values over its eight-year life:

Year	1	2	3	4	5	6	7	8
Salvage value	1,920,000	1,560,000	1,320,000	1,050,000	890,000	789,000	623,000	548,000

3. Operating cash flow amounts to P411,000 per year. The project has a bailout payback period of ___.

Girlie Gilmore plans to sell berry pies at a local farmer's market during the 3-month period of June to August. The permit and space rental will cost her P100,000 for the June through August season. The pies will sell for P420. Ingredients and overhead average P175 per pie. She also has to pay 5% of her gross sales to the market's organizers.

4. How many pies will she need to sell during the 3-month period to cover her total operating costs? Round-up your final answer to the nearest unit (e.g. 102.33 units should be entered as 103 units).

5. How many pies will she need to sell to cover her cash operating costs if the P100,000 includes a depreciation expense amounting to P5,000? Round-up your final answer to the nearest unit (e.g. 102.33 units should be entered as 103 units).