Anand is considering automating his glass factory with the purchase of a machine costing ₹ 10,95,000. Shipping and installation costs are ₹25,000.…

CA Intermediate · Financial Management and Strategic Management · MTP · September 2026
Anand is considering automating his glass factory with the purchase of a machine costing ₹ 10,95,000. Shipping and installation costs are ₹25,000. He has calculated that the automation would result in savings of ₹ 1,25,000. The machine has a useful life of 3 years. What will be the incremental cash outlay of this automation?
(A) (A) ₹ 11,20,000
(B) (B) ₹ 9,70,000
(C) (C) ₹ 9,95,000
(D) (D) ₹ 10,70,000

Suggested Answer and Working Notes:

Correct Answer: Option (A)

(A) ₹ 11,20,000

Topics: Part-A: Financial Management

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