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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