6. It is desired to determine the present economic value of an old machine by considering how it compares with the best modern machine that would replace it. The old machine is expected to require...

Extracted text: 6. It is desired to determine the present economic value of an old machine by considering how it compares with the best modern machine that would replace it. The old machine is expected to require out-of-pocket costs of Php 85,000 each year for 4 years and then be scrapped for Php 5,000 residual value. The new machine requires an investment of Php 40,000 and would have out-of-pocket costs of Php 79,000 a year for 8 years and then zero salvage value. Invested capital should earn a minimum return of 15% before taxes. Determine the present value of the old machine.