A company uses a type of equipment which costs P5,000 with life of 2 years and final salvage value of P800.

A company uses a type of equipment which costs P5,000 with life of 2 years and final salvage value of P800. How much could the company afford to pay for another for another type of equipment of the same purpose whose life is 3 years with a final salvage value of P1,000? Money is worth 4%.