Font

Alignment

Number

$f_x$

B

C

Option$-1$: Initial purchase price $=$ Rs$.25,00,000,$ Annual operating cost Rs$.45,000$ at the end of $1$st year and increasing by Rs$.3000$ in the subsequent years till the end of useful life, Annual income $=$ Rs$.1,20,000,$ Salvage value $=$ Rs$.5,50,000,$ Useful life $=10$ years.

Option$-2$: Initial purchase price $=$ Rs$\mathrm{.}30,00,000,$ Annual operating cost $=$ Rs$\mathrm{.}30,000,$ Annual income Rs$\mathrm{.}1,50,000$ for first three years and increasing by Rs$.5000$ in the subsequent years till the end of useful life, Salvage value $=$ Rs$\mathrm{.}8,00,000,$ Useful life $=10$ years.

Option$-3$: Initial purchase price $=$ Rs$\mathrm{.}27,00,000,$ Annual operating cost Rs$.35,000$ for first $5$ years and increasing by Rs$.2000$ in the successive years till the end of useful life, Annual income $=$ Rs$\mathrm{.}1,40,000,$ Expected salvage value $=$ Rs$\mathrm{.}6,50,000,$ Useful life $=10$ years. Using present worth method, find out which alternative should be selected, if the rate of interest is $8\%$ per year.

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Alter

Initial price