An investment of P XXXXXXXXXXis being considered for a new lathe machine. Estimated economic life of the lathe is 12 years with a salvage value of P XXXXXXXXXXProjected annual income and expenses for...

An investment of P135 000.00 is being considered for a new lathe machine. Estimated economic life of the lathe is 12 years with a salvage value of P10 000.00. Projected annual income and expenses for the investment are P80 000.00 and P30 000.00, respectively. Using an MARR of 15% compounded annually and applying PW analysis, determine if the lathe should be purchased. (Ans. Purchase is justified, P137 900.00)