Time Value of Money Illustration 17


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Mittal enterprises purchases a machinery for  1,00,000 on 1st January 2002. The profit expected from the machinery are as follows:

2002    –              7000

2003    –              9000

2004    –            19000

2005    –           23,000

2006    –            35,000

The depreciation on machinery is to be provided @10% p.a. WDV. At end of 2006, the machinery is sold at loss of  7,500. The rate of interest being 9%. Comment on Decision.


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