Question

acquired a heavy road trailer at a cost of`2,00,000 (with no breakdown ofcomponent parts). The estimated useful life is 10 years. At the end of the sixth year, theengine requires replacement, as further maintenance is uneconomical due to the off-roadtime required. The remaining parts of the vehicle is perfectly road worthy and is expected tolast for the next four years. The cost of the new engine is`90,000. The discount rateassumed is 5% and the discount factor is 0.746

Answer 1

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