A company purchased a new machine for Rs $5, 00, 000$ and machine's test run was started to make sure that machine works properly. There was expense of Rs $5, 000$ incurred on test run, however the sale proceeds of test production were Rs $2, 000$ . You are required to find out the total cost of machine?

5, 00, 000

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5, 05, 000

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5, 03, 000

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4, 95, 000

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Solution

The correct option is C $5, 03, 000$
Calculation of Cost of Machine
Purchase price of Machine 500,000
Add: Expenses on test run 5000
Less: Revenue from Test run 2000
Total Cost 503,000

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