CA CPT Model Test Paper 9 with solutions for online practice

A machine with useful life of seven years costs Rs. 10000, while another machine will useful life of five years costs Rs. 8000. The first machine saves labour expenses of Rs. 1900 annually and the second one saves labour expenses of Rs. 2200 annually. Determine the preferred course of action. Assume cost of borrowing as 10% compounded per annum: [Given : (1.1)${}^7$ = 1.9487 and (1.1)${}^5$ = 1.6105]