Question: A firm is using a machine whose purchase price is Rs 13,000. The installation charges amount to Rs 3,600 and the machine has a scrap

A firm is using a machine whose purchase price is Rs 13,000. The installation charges amount to Rs 3,600 and the machine has a scrap value of only Rs 1,600 because the firm has a monopoly of this type of work. The maintenance cost in various years is given in the following table.

The firm wants to determine after how many years should the machine be replaced on economic considerations, assuming that the machine replacement can be done only at the year ends.

Year 1 2 3 4 5 6 7 8 9 Cost (Rs) : 250 750 1000 1500 2100 2900 4000 4800 6000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Understanding Management Questions!

Topic : Replacement Analysis Problem 1 A firm is using a machine whose purchase price is $13,000. The installation charge amount to $3,600 and the machine has scrap value of only $1,600 because the...

[40] QUESTION ONE Ted makes sports equipment. He is currently considering bidding for a job to manufacture a 'Supergym' for one of the country's leading provincial rugby teams, the 'Stallions'. There...

Q # 1 Distinguish between capital expenditures and revenue expenditures Q # 2 National company acquired a machine on January 01, 2005 at a list price of Rs. 565, 000 with a trade discount of 2%. The...

National company acquired a machine on January 01, 2005 at a list price of Rs. 565, 000 with a trade discount of 2%. The terms of payment was 3/10, n/30, including a sales tax of 4%. The Co. availed...

#2 National company acquired a machine on January 01, 2005 at a list price of Rs. 565, 000 with a trade discount of 2%. The terms of payment was 3/10, n/30, including a sales tax of 4%. The Co....

1. (a) 88 Company is considering the repiacement of its existing machine with a new machine. The Purchase price oi the New machine is Rs. 26 Lekhs and its expected Life is 8 years. The company...

that it is January 1, 2019, and that the Mendoza Company is considering the replacement of a machine that has been used for the past 3 years in a special project for the company. This project is...

6 yes M/S Rohini Lid wants to enter into the field of production and sale of household appliances Following details ate available to select the best Machine to start production Particulars Machine...

Complete the following questions. I have attached both the chapters which you will be answering the questions from. Make sure to answer it thoroughly and specifically. Ch 10 (p 107 of text or p 41 of...

Frank and Fanny, a married couple with no children, like to hike along the trails in Hillside Country Park located behind their sub-urban home during the weekends. The monthly salary of Frank and...

dw f(x): R Ra Give an informal proof of Stokes' formula Jos for S = [a, b] ? R and w = differentiable function.

In determining the unit cost of products or services, direct cost of materials and indirect cost of labour are allocated to the cost of products. true or false

Which of the following would the nurse expect to assess in a patient who is suspected of having an Ascaris infection? a. Cough and signs of pulmonary infestation b. Cardiac arrhythmias and low blood...

Draw a diagram for input and output of the process, pointing out the energy inputs.

Visit a website of your choice, and try to find out which practices the organisation uses to promote and monitor corporate responsibility.

Illustrate each of the ways in which organisations do this with a current example.

Which of these funds is it proper to report depreciation? Oa. General Fund O b. Capital Projects Fund O c. Enterprise Fund O d. Debt Service Fund

2 Better plc is comparing two mutually exclusive projects, whose details are given below. The company's cost of capital is 12 per cent. Project A Project B Em m Year 0 (150) (152) Year 1 40 80 Year 2...

Failure to record an accrued liability for wages earned by employees causes a company to: OA. overstate assets. OB. overstate stockholders' equity. OC. overstate liabilities. OD. understate net...