A manufacturer estimates that his machine depreciates by 15% of its value at the beginning of the year. Find the orginal value (cost) of the machine, if it depreciates by 5,355 during the second year.
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=>Assume the original cost of machine is =(M)
=>Depreciation during 1st year is 0.15M
=>Value at the beginning of 2nd year, after deprecation during the first year = 0.85M
Depreciation during 2nd year is 0,15(0,85M) - 5355 Hence M=5355/(0.15 X 0.85)
=Rs. 42000
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