The value of a machine depreciates every year by 20%.

Let Rs $x$ be the value of the machine last year.

Then, present value $=80 \%$ of $\operatorname{Rs} x$

$=\operatorname{Rs}\left(x \times \frac{80}{100}\right)$

$=\operatorname{Rs} \frac{4 x}{5}$

Now, $\frac{4 \mathrm{x}}{5}=160000$

$\Rightarrow \mathrm{x}=\left(160000 \times \frac{5}{4}\right)$

$\Rightarrow \mathrm{x}=40000 \times 5=200000$

Hence, the value of the machine last year was Rs $2,00,000$.