On January 1, Delmar Company purchased a new machine for P100,000 to be depreciated over five years. It will have no salvage value at the end of five years. For book and tax purposes, depreciation will be P20,000 per year. It is expected to produce annual cash flow from operations, before income taxes, of P40,000. Assume that Delmar uses a time-adjusted rate of 12% and that its income tax rate will be 40% for all years. The NPV of the machine should be (Round off your PV factors to two decimal places):
A) P13,680 negative
B) P14,000 positive
C) P5,490 negative
D) P15,520 positive