Question

An expenditure of Rs 20,000 is made to modify material handling system in a small job shop. This modification will result in first-year savings of Rs 2,000, second-year savings of Rs 4,000 and savings of Rs 5,000 per year thereafter. How many years must the system last if a 25% per year return on investment is required? The system is tailor-made for this job shop and has no salvage value at any time. Use beginning-of-year cash flow convention to solve this problem.

Answer 1

Answer:

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Explanation:

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