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Principle of Process Economics

Quick practice

Question 1 of 5

A piece of Equipment originally costing 2 L rupees is purchased. Service life of the piece was estimated to be 20 years and the salvage & scrap value at the end was assumed to be 20 k rupees. It is needed to purchase the equipment at the end of service life.                                             

For this purpose, a depreciation fund was set up. Price of the new equipment also varies by 1% of the initial price every year.

If after 12 years, it is required to purchase the new equipment and depreciation fund is available, then calculate how much money is required to make the new purchase?

A

 23 K rupees 

B

24 K rupees

C

 20 K rupees 

D

 27 K rupees 

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