Question

M & Co. purchased a machine for a certain sum. The firm has a policy of charging 8 % depreciation on written down value. The depreciated value of machine after three years is Rs 3,89,344. Purchase price of machine = ?

• A. Rs$5,00,000$
• B. Rs$4,60,000$
• C. Rs$4,23,000$
• D. Rs$5,52,000$

Answer 1

The correct option is A Rs$5,00,000$

Depreciated value after 3 years = Rs 3,89,34

Rate of depreciation 8%

Calculation of purchase price:

Purchase price = Rs 3,89,344/(1-0.08)³ x 100

^{=5,00,000(Rounded off).}