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If the average interest rate is 12% and depreciation is to be accounted for by straight line method at 10%, which of the following equipment will be most economical?

[A].	Initial cost Rs. 7000 Annual disbursements Rs. 2500	[B].	Initial cost Rs. 4000 Annual disbursements Rs. 6000
[C].	Initial cost Rs. 6000 Annual disbursements Rs. 3880	[D].	Initial cost Rs. 5000 Annual disbursements Rs. 3500
[E].	Initial cost Rs. 5500 Annual disbursements Rs. 4000

Answer: Option A

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