A P 1, 200, 000.00 m a c h i n e was p u r c h a s e d by a c o m p a n y. The s a i d machine has an a n t i c i p a t e d e c o n o m i c life of 5 years with a s a l v a g e v a l u e of P 80,000.00 given that the a n n u a l rate of i n f l a t i o n is 7% during the next 5 years. T h e m a c h i n e w i l l t h e n b e r e p l a c e d w i t h t h e s a m e n e w m ac h i n e a n d t h e c o m p a n y w i l l a c c u m u l a t e t h e n e c e s s a r y c a p i t a l b y m a k i n g e q u a l end-of-year d e p o s i t s i n a r e s e r v e f u n d t h a t e a r n s 6% p e r a n n u m . D e t e r m i n e t h e a m ou n t o f a c t u a l d e p o si t
A P 1, 200, 000.00 m a c h i n e was p u r c h a s e d by a c o m p a n y. The s a i d machine has an a n t i c i p a t e d e c o n o m i c life of 5 years with a s a l v a g e v a l u e of P 80,000.00 given that the a n n u a l rate of i n f l a t i o n is 7% during the next 5 years.
T h e m a c h i n e w i l l t h e n b e r e p l a c e d w i t h t h e s a m e n e w m ac h i n e a n d t h e c o m p a n y w i l l a c c u m u l a t e t h e n e c e s s a r y c a p i t a l b y m a k i n g e q u a l end-of-year d e p o s i t s i n a r e s e r v e f u n d t h a t e a r n s 6% p e r a n n u m . D e t e r m i n e t h e a m ou n t o f a c t u a l d e p o si t .
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