Question

From the following details calculate the capital expenditure to be capitalized.
(i) Basic price of the Machine Rs. $1,65,000$
(ii) Excise duty Rs. $25,000$
(iii) Freight Rs. $25,000$
(iv) Insurance Rs. $5,000$
(v) Erection charges Rs. $5,000$
(vi) Rebate Rs. $25,000$.

• A. Rs. $2,00,000$
• B. Rs. $1,75,000$
• C. Rs. $1,50,000$
• D. Rs. $1,90,000$

Answer 1

The correct option is A Rs. $2,00,000$

Capital expenditure = Basic price of machinery + Erection charges + Freight + insurance

Capital expenditure = Rs. 1,65,000 + Rs. 5,000 + Rs. 25,000 + Rs. 5,000

Capital expenditure = Rs. 2,00,000.