SOLVED NUMERICAL PROBLEMS
- Calculate the initial investment cost of an expansion project, if:
Cost of machine:
Rs 10,00,000
Cost of transporting machine:
50,000
Other installation expenses:
20,000
Increase in net working capital:
60,000
Cost of training personnel:
20,000
Initial cost of advertisement:
20,000
Tax rate:
30%
Solution
(i) Installation of machine:
Rs 10,70,000
(ii) Training cost: 20000 × (1−0.30)
14,000
(iii) Increase in net working capital:
60,000
(iv) Initial advertising cost:
20,000
Total
11,64,000
- A firm has to replace the existing machine. The cost of the new machine, transport and installation are respectively Rs 10,00,000; Rs 1,00,000 and Rs 20,000. The old machine ...
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