An existing machine in a factory has an annual maintenance cost of P40,000. A new and more efficient machine will require an investment of P90,000 and is estimated to have a salvage value of P30,000 at the end of 8 years. Its annual expenses for maintenance of P22000. If the company expects to earn 12% on its investment, will it be worthwhile to purchase the new machine using the present worth method? INCLUDE CASHFLOW DIAGRAM

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To determine whether it is worthwhile to purchase the new machine using the present worth method wel... View the full answer