The Vivek & Co. Ltd is considering the purchase of a new machine. Two options have been suggested, each costing Rs. 400,000. Earnings after taxation but before depreciation are expected to be as follows

Year	Machine X Rs.	Machine Y Rs.
1 2 3 4 5	40,000 120,000 160,000 240,000 160,000	120,000 160,000 200,000 120,000 80,000

The Company has a target rate of return on capital @ 10% and Depreciation rate is 20% (straight line method). On this base, you are required

a) To compare profitability of the machines and state which option you consider financially favourable

b) Also work the Pay-back Period and

c) ARR for each project.