Decision making
This query is : Resolved
anil motwani
(Querist)
27 December 2010
I want to know which fixed asset to buy. There are two alternatives: 1st price of FA is 91000 with salvage value after 3 years is 27000 & 2 Price of FA is 57000 with salvage value after 3 years is 5000. Rate of depri is 20% writtern down. Can any one tell me which asset to buy with detailed working. Disount factor 9%
CA Anisha Ray
(Expert)
28 December 2010
Your question is incomplete. you need to give the expected cash flow details for each of the machine in question. There has to be a reason for such a huge difference in prices of these machines considering they are for same purpose.
If no further details are available, it makes sense to go with the 2nd machine as your immediate cash outflow is lesser.
If no further details are available, it makes sense to go with the 2nd machine as your immediate cash outflow is lesser.
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