Question

A machine with useful life of 7 years costs Rs 10,000 while another machine with
useful life of 5 years costs Rs 8000. The first machine saves labour expenses of Rs
1900 annually & the second one saves labour expenses of Rs 2200 annually. Which
machine should be purchased? Assume cost of borrowing as 10 % compounded
per annum
a) machine I .b) machine II
c) both
d) neither​

Answer 1

Answer:

buy 2 nd machinery

use the equation of present value ordinary

the we will get present value of A=9249 B=8339

and since the case it is advisable to buy machinery B

Step-by-step explanation:

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