A certain corn mill decided to sell its old engine which has been used for 5 years costing P7,200 new. The average operating cost per year thus far has been P4,200. The replacement costing P12,000 has...

Extracted text: A certain corn mill decided to sell its old engine which has been used for 5 years costing P7,200 new. The average operating cost per year thus far has been P4,200. The replacement costing P12,000 has an estimated life of 15 years, estimated annual operating cost 20% lower than that of the old engine. If interest is 5% and using straight-line depreciation, how much must the old engine be sold if its working life and its salvage value have been assumed as 15 years and P500, respectively? Actual total cost for the old engine considering depreciation, interest and operation is P347 less than that of the new. Salvage value of the replacement is P800. O P4,949.73 O P3, 899.27 O P4, 021.33 O P4. 051.27