capital budgeting

4. An existing company has a machine which has been in operation for 2 years, its estimated useful life is 4 years with no salvage value in the end. Its current market value is Rs. 25000 . The management is considering a proposal to purchase an improvement model of the machine which gives the increased output. The relevant particulars are ac follo.... Should the existing machine be replaced ? Assume that : 1. Required rate of return is 10% and 2. The company uses written down value method of depreciation (a) 20% and it has several machines in the 20\% block. 16 UNIT-I