Company Y is operating an elderly machine that is expected to produce a net cash inflow of Rs 40,000 in the coming year and Rs 40,000 next year. Current salvage value is Rs 80,000 and next years value is Rs 70,000. The machine can be replaced now with a new machine, which costs Rs 1,50,000 but is much more efficient and will provide a cash inflow of Rs 80,000 a year for 3 years. Company Y wants to know whether it should replace the equipment now or wait a year with the clear understanding that the new machine is the best of the available alternatives and that it in turn be replaced at the optimal point. Ignore tax. Take opportunity cost of capital as 10 per cent. Advise with reasons.