4 A firm is considering replacement of a machine, whose cost price is Rs 12,200 and the scrap value is only Rs 200 The maintenance costs are found as follows When should the machine be replaced Year 1 2 3 4 5 6 7 8 Maintenance cost (Rs) 200 500 800 1,200 1,800 2,500 3,200 4,000

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Question: 4. A firm is considering replacement of a machine, whose cost price is Rs 12,200; and the scrap value is only Rs 200. The maintenance

4. A firm is considering replacement of a machine, whose cost price is Rs 12,200; and the scrap value is only Rs 200. The maintenance costs are found as follows:

Year 1 2 3 4 5 6 7 8 Maintenance cost (Rs)

When should the machine be replaced?

Year 1 2 3 4 5 6 7 8 Maintenance cost (Rs) 200 500 800 1,200 1,800 2,500 3,200 4,000

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