XYZ Radiology Centre acquired a new imported X-ray machine for Rs. 10,50,000. Octroi paid on the machine was Rs. 5,000. Expenses of setting up and starting the machine was Rs. 2,000. The Centre spent Rs. 2,500 on distribution of flyers, advertising the new facility, and Rs. 50,000 on an inaugural ceremony by the District Collector. The amount that can be classified as capital expenditure would be:

1
Rs. 10,59,500
2
Rs. 11,04,500
3
Rs. 10,55,000 
4
Rs. 10,57,000 

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