A small company XYZ Corporation is in the business of cleaning bottles for large soft drink makers. It presently owns a bottle-cleaning machine that operates for 5,000 hours per year at the rate of 50 bottles being cleaned per hour. XYZ charges P0.10 per cleaned bottle. The machine may be renovated to increase its output by an additional 20 cleaned bottles per hour, with no increase in its current operating cost which amounts to P10,000 annually. The renovation will cost P50,000 (as financed by bonds, P10,000; and retained earnings, P440,000) will extend the machine’s life to 5 years, and will result to zero salvage value at the end of that time. Is the renovation acceptable? Explicit cost for bonds is 15% while for retained earnings is 20%.