Multiple choice

Purchase price of machine 1, 50, 000, installation charges Rs. 25, 000, residual value Rs. 40, 960. The SLM rate of depreciation is 14.76% p.a. The useful life of the machine is

  1. 4.5 years

  2. 5.6 years

  3. 6.8 years

  4. 7.2 years

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Correct Answer: 6.8 years approxIn Straight LIne Depreciation method,Rate of Depreciation = 1/useful life *100%14.76% = 1/ useful life*100%useful life= 100%/14.76%6.775 or 6.8 approx