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A machine costs a company Sh. 100,000 and its effective life is estimated to be 20 years. If the scrap is expected to realize Sh.

A machine costs a company Sh. 100,000 and its effective life is estimated to be 20 years. If the scrap is expected to realize Sh. 50,000 only. Find the sum to be invested every year at 5% per annum compound interest for 20 years, to replace the machine which is expected to cost them 25% over its present cost. Assume that the sale of the scrap would be utilized for meeting the cost of the machine.

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