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2. A company is considering an investment proposal to install a new machine at the cost of Rs. 1,50,000. The machine has a life of

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2. A company is considering an investment proposal to install a new machine at the cost of Rs. 1,50,000. The machine has a life of 10 yrs. and salvage value is Rs. 5,000. The tax rate is 40%. Assume the firm uses straight line method of depreciation. Compute : 12+8 (a) Pay back period (b) Net present value at 10% discount rate

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