When should the company replace the machine and what is it's minimum average cost? *
(4 Points)
A company has a machine whose cost is Rs. 30,000. Its maintenance cost and resale value
at the end of different years are as given below:
Year
2
2
3
5
6
Maintenance cost (Rs.) : 4.500
4,700 5,000 5,500 6,500 7.500
Resale value (Rs.)
27.000 25.300 24.000 21.000 18.000 13,000
O 5 years, Rs.6730
3years, Rs.6733
4
years, Rs.6729
O none of above
2
chine be replaced?Also give the minimum average cost.
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