Rose Company is considering replacing a machine with a book value of P200,000, a remaining useful life of 5 years, and annual straight-line depreciation of P40,000. The existing machine has a current...

Rose Company is considering replacing a machine with a book value of P200,000, a remaining useful life of 5 years, and annual straight-line depreciation of P40,000. The existing machine has a current market value of P200,000. The replacement machine would cost P300,000, have a 5-year-life, and save P100,000 per year in cash operating costs. The replacement machine would be depreciated using the straight-line method and the tax rate is 40%. What would be the increase in annual net cashflow if the company replaces the machine?