A business owner is choosing between two alternatives. The first cost of the first alternative, Alternative I, is P17,500 and its salvage value after 4 years is P5,300. Using this alternative he will earn P2,400 annually, but it will also cost him P900 per year to maintain and use this alternative. The first cost of the second alternative, Alternative J, is P15,000 and its salvage value after 4 years is P5,200. Using this alternative he will earn P1,200 annually, but his annual maintenance cost is increasing by P200 each year starting at P1,000 on the first year. At an interest rate of 15% per year, compounded semi-annually, which should be selected on the basis of a present worth analysis? How much cheaper is the better
alternative among the two? Round off your final answer to the nearest
ten peso.