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A piece of equipment costing Rs. 42,000 was put into use 12 years ago. At that time, the service life was estimated as 20 years
A piece of equipment costing Rs. 42,000 was put into use 12 years ago. At that time, the service life was estimated as 20 years and salvage & scrap value at the end of service life was assumed to be zero. On this basis, a straight line depreciation was setup. The equipment can now be sold for Rs. 11,000. Now we can setup a more advanced model of the same equipment for Rs. 56000. Assuming the depreciation fund is available for use, how much new capital must be supplied to make the purchase of advanced model.
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