1A company named Robys cube decided to replace the existing computer system of their organization. Original Cost of old system was Rs 25000 and was installed 5 years ago Current market value of old system is Rs 5000.Depreciation of the old system was charged with a life of ten years

Depreciation of the new system will be charged with the life of 5 years .Estimated salvage value of the old system is zero.

Present cost of the new system is Rs 50000 and estimated salvage value of the new system is Rs 1000.

Estimated cost saving is Rs 5000. Increase in sale with new system is assumed to be 10% of the original total sales of Rs 100000 . Company follows straight line method of depreciation. Cost of capital is 10% and tax rate is 30%