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Straight Line Method(SLM)

Original cost...

Question

Original cost of machine is Rs. 4,00,000 with a scrap value of Rs. 25,000 after 4 years. Calculate rate of Depreciation.

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Solution

Depreciation = $\frac{4, 00, 000 - 25, 000}{4}$
= Rs. 93,750

Rate of Deprection = $\frac{D e p r e c i a t i o n}{O r i g i n a l C o s t}$ $\times 100$

= $\frac{93, 750}{4, 00, 000}$ $\times 100$
= 23.4375%

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