Question

Purchase Price of Machine Rs. 80,000, Installation Charges Rs. 20,000, Residual Value Rs. 40,960, Useful life 4 years, the rate of depreciation under WDV Method is:

• A. 25%
• B. 20%
• C. 14.76%
• D. None of these

Answer 1

The correct option is B 20%

Here , formula for WDV is - deprecciation rate = 100 * (1-n√s/c)

where n = number of years , s = salvage value , c = cost of asset

=[1-4√40960/100000] * 100

= [1-4√0.4096] * 100

= [1-.80]*100

=.20*100

=20