BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Amount of Annual Depreciation = Cost of Machine − Scrap Value of Machine Life in Years = 1, 20, 000 − 72, 000 4 = Rs 12, 000 Rate of Depreciation = Amount of Depreciation Cost of Machine × 100 = 12, 000 1, 20, 000 × 100 = 10 % p.a.

Detailed explanation-2: -Annual depreciation is equal to the cost of the asset, minus the salvage value, divided by the useful life of the asset.

Detailed explanation-3: -Formula: (asset cost – salvage value) / useful life. How it works: You divide the cost of an asset, minus its salvage value, over its useful life. That determines how much depreciation you deduct each year.