Q1 Bongaigaon Refineries wishes to install an air pollution control system in its facility situated in Assam. The system comprises of four types of equipments that involve capital investment and annual recurring costs as given in Table 6.1. Assume a useful life of 10 years for each type of equipment, no salvage value and that the company wants a minimum return of 10% on its capital. Which equipment should be chosen? Table 6.1 Costs for four equipments Investment (2) Annual recurring costs: Power () Labor () Maintenance (2) Taxes and insurance () Total annual recurring costs (2) A 2,00,000 64,000 1,20,000 96,000 50,000 Equipments B C 2,76,000 3,00,000 59,000 36,000 1,36,000 1,84,000 64,000 22,000 54,000 3,30,000 3,13,000 D 3,25,000 28,000 1,96,000 10,000 68,000 72,000 3,10,000 3,06,000

Q1 Bongaigaon Refineries wishes to install an air pollution control system in its facility situated in Assam. The system comprises of four types of equipments that involve capital investment and annual recurring costs as given in Table 6.1. Assume a useful life of 10 years for each type of equipment, no salvage value and that the company wants a minimum return of 10% on its capital. Which equipment should be chosen? Table 6.1 Costs for four equipments Investment (2) Annual recurring costs: Power () Labor () Maintenance (2) Taxes and insurance () Total annual recurring costs (2) A 2,00,000 64,000 1,20,000 96,000 50,000 Equipments B C 2,76,000 3,00,000 59,000 36,000 1,36,000 1,84,000 64,000 22,000 54,000 3,30,000 3,13,000 D 3,25,000 28,000 1,96,000 10,000 68,000 72,000 3,10,000 3,06,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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