Question

Original cost of an asset was Rs. $1,00,000$. Life 5 years. Expected salvage value was Rs. 5,000, then rate of depreciation p.a will be _______.

• A. $20.0$%
• B. $19$%
• C. $19.5$%
• D. $19.4$%

Answer 1

The correct option is B $19$%

Option B is correct. In straight line method, depreciation charged remains same for every year. Depreciation is calculated as:
Cost price - salvage value / Estimated life of depreciation
1,00,000 - 5000 /5
= 19000
Depreciation for 3rd year will be - 19000.
Rate of depreciation = Depreciation /original cost of an asset * 100

19000/100000*100
= 19%