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A company is contemplating to purchase a machine. Machines A is available costing Rs.500000. In...

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Accounting

A company is contemplating to purchase a machine. Machines A is available costing Rs.500000. In comparing the profitability of the machines , a discounted rate of 10% is to be used . Earnings after taxation are expected as follows :
Year Machine A (Rs)
I 150000
II 200000
III 250000
IV 150000
V 100000
Compute Pay Back period and ARR assuming Straight Line Method of Depreciation.

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