Question

2. A company is currently considering the replacement of a machine
originally costing : 50,000. The current book value of the machine is NIL and it
can continue for another 6 years after which it will have NIL salvage value. The
cost of new machine is 2,10,000 but it will require another 30,000 to install it.
New machine is also likely to last 6 years with no salvage. The projected profits
from the existing and new machine are as under :
0
Year
Expected after tax profit

existing machine new machine
year PAT PAT
1 200000 240000
2 250000 310000
3 310000 350000
4 360000 410000
5 410000 430000
6 500000 510000

calculate initial oultflow.​

Answer 1

Answer:

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Explanation:

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