The cost of an earth moving equipment costs Rs. 5,00,000 / – and estimated life is 10 years old and Rs. 50,000 / – Should a similar annual amount be kept separately at the end of every 10 years for replacement if interest rate is 8% per annum and if the drowning fund factor is 10% for 8% per annum at 0.06 9 per annum?
A. Rs. 31050
B. Rs. 34500
C. Rs. 37 9 50
D. Rs. 50000
Answer:A
The cost of an earth moving equipment costs Rs. 5,00,000 / – and estimated life is 10 years old and Rs. 50,000 / – Should a similar annual amount be kept separately at the end of every 10 years for replacement if interest rate is 8% per annum and if the drowning fund factor is 10% for 8% per annum at 0.06 9 per annum?
A. Rs. 31050 B. Rs. 34500 C. Rs. 37 9 50 D. Rs. 50000