1. You are promised an 8-year streams of income from buying a new technology at the initial amount of P 40, XXXXXXXXXXIf the income increases by 3%, 4%, 5% and 6% respectively from the 2nd to 5th year...

1. You are promised an 8-year streams of income from buying a new technology at the initial amount of P 40,000.00. If the income increases by 3%, 4%, 5% and 6% respectively from the 2nd to 5th year then return to initial amount from the 6th to the 8th year, what is the present value of stream of income if the current interest prevailing is 6.5%?

2. You bought a new machine worth P 345,000.00. Research on this machine showed that it will reduce cost of production in the following sequence: Year 1 = P 22,500; Year 2 = P27,300; Year 3 = 30,500.00; Year 4 = 32,450 and Year 5 = 29,600. If the current interest rate is 7.2%. Should the machine be bought?