Question

From a machine that cost Rs.50,000 and has residual value of zero the following costs and revenues are expected to be derived over its life of 4 years: Revenue per annum Rs. Cost per annum Rs. Years 1-3 30,000 10,000 Year 4 25,000 20,000 The cost of capital is 10%. In which year does the project payback?

A 1 year
B 2 years
C 2.5 years
D 3 years
E 4 years
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