this question seems to be tricky, and I would like to ask if you have any idea as to the steps to take in coming up with the answer. because we never went through this particular topic in our studies.

Question 1 - Capital Budgeting 20 Marks Vikas Ltd is considering the purpose of a new machine which would carry out some operations at present performed by manual labour. The two alternative models under consideration are X and Y. From the following information ascertain the profitability of the machine using NPV method. Assume tax rate 30% and cost of capital 10% Particulars Machine X Machine Y Cost of the Machine 300,000 500,000 Estimated Savings in scrap 20,000 30,000 Additional cost of supervision 24,000 32,000 Additional cost of maintenance 14,000 22,000 Cost of indirect material 12,000 16,000 Savings in wages: Wages per workers per annum 30% 1,000 1,200 Number of workers not required 150 200 Life of the machine 10 years 12 years A. Which machine would be more profitable? Advise with appropriate evidences. Required to show all the workings. (15 Marks)