Question: EXAMPLE 11.3 A company has received quotes for its recent advertisement for the purchase of a sophisticated milling machine. The data are as per the

EXAMPLE 11.3 A company has received quotes for its recent advertisement

EXAMPLE 11.3 A company has received quotes for its recent advertisement for the purchase of a sophisticated milling machine. The data are as per the estimate in today's rupee value. Machine X Machine Y 20,00,000 15,00,000 7 7 Purchase price (Rs.) Machine life (years) Salvage value at the end of machine life (Rs.) 2,00,000 3,00,000 Annual operating & maintenance cost (Rs.) 3,00,000 2,50,000 Assuming an average annual inflation of 5% for the next five years, determine the best machine based on the present worth method. Interest rate is 15%, compounded annually

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