How much new capital will be required

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Question - A firm purchased 12-years ago a computerized machine worth P 613,011. As the life of the machine was 20 years, funds are reserved based on a Sinking-Fund method of depreciation. Now the firm wishes to replace it with a current model possessing several advantages. The firm can sell it today for P 89,286. The new machine will cost P 1,137,024. How much new capital will be required to make the purchase? Assume interest to be 23% cpd-a.

Reference no: EM133105030

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