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The annual equal installment comes as : 0.2473*35000=Rs 8655/- for 5 years. Since the useful life of refurbished machine is also 5 years either Ravinder exhaust the whole money he will get from business or will keep some amount for depreciation. To start up with a low cost and low volume business with stiff competition he should think of exhausting the whole profit he will get to establish the business.
Since in the same existing facility he is thinking of installing the photo copier machine , common charge like electricity and rent is allocated to all the three business equally. Below is the cost table for photocopier
At Re1/- per photocopy rate
The break even comes at:
3800+8655+0...
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