The original investment in the new truck can be calculated as follows:
List price of the new truck: Rs. 3,150,000
Trade-in allowance for the old truck: Rs. 750,000
Net cost of the new truck: Rs. 3,150,000 - Rs. 750,000 = Rs. 2,400,000
Therefore, the original investment in the new truck is Rs. 2,400,000.
Ruman construction Limited has obtained a new truck with a list price, including options of Rs. 3150,000. The dealer had given a generous trade in allowance of Rs. 750,000 on its old truck that had a whole sale price of Rs. 450,000. Sales tax was Rs. 189,000. The annual cash operating costs of old truck was Rs. 630,000. The new truck was expected to reduce these costs by 1/3rd to 420,000 per year. The amount of original investment in the new truck is
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