Charizard Corporation is considering replacing an old machine with a new one. The new machine costs Php 2,000,000. Installation costs is Php 317,000 and the working capital is Php 281,000. The old machine was acquired three (3) years ago at a cost of Php 850,000 and is known to have 8 productive life. The book value of old machine at the time the decision to replace it is considered, is Php 400,000. Corporate income tax rate is at 34% and the old machine can be resold for Php 700,000. How much is the initial investment?

Select one:

a. Php 2,000,000.00

b. Php 1,955,375.00

c. Php 2,135,000.00

d. Php 1,850,000.00

Pls show steps