Lab U Company plans to replace its machinery with a new one costing P400,000 with an estimated useful life of ten years without scrap value. The old machinery has a book value of P40,000 and can be sold for P 50,000. The acquisition of the new machinery will yield an annual cash savings of P 80,000 before income tax. Income tax rate is 35%

Required: Compute for the following:

1. Net investment on the new machine
2. Net income (after tax)
3. Annual net cash inflows expected from the new machine
4. Payback period (Round answer to 3 decimal places e. g. 4.358)
5. Net present value, assuming that the minimum desired rate of return is 15% (Round
6. present value factor to 4 decimal places; if negative enclose it in parenthesis e. g.
7. (55,000)
8. The discounted cash flows rate of return (Round answer to 2 decimal places e. g.
9. 15.67%)
10. Present value payback (Round answer to 2 decimal places e. g. 10.65)