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Q2: A machine costs Rs. 7,00,000. Its annual operation cost during the first year is Rs. 60,000 and it increases by Rs. 7,000 every year

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Q2: A machine costs Rs. 7,00,000. Its annual operation cost during the first year is Rs. 60,000 and it increases by Rs. 7,000 every year thereafter. The maintenance cost during the first year is Rs. 80,000 and it increases by Rs. 10,000 every year thereafter. The resale value of the machine is Rs. 3,00,000 at the end of the first year and it decreases by Rs. 75,000 every year thereafter. Assume an interest rate (discounting factor) of 20% and inflation of 5%, compounded yearly. Find the inflation adjusted economic life of the machine. Q2: A machine costs Rs. 7,00,000. Its annual operation cost during the first year is Rs. 60,000 and it increases by Rs. 7,000 every year thereafter. The maintenance cost during the first year is Rs. 80,000 and it increases by Rs. 10,000 every year thereafter. The resale value of the machine is Rs. 3,00,000 at the end of the first year and it decreases by Rs. 75,000 every year thereafter. Assume an interest rate (discounting factor) of 20% and inflation of 5%, compounded yearly. Find the inflation adjusted economic life of the machine

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