An asset is purchased for Rs. 25,000. Depreciation is to be provided annually according to the
straight line method. The useful life of the asset is 10 year and the residual value is Rs. 5,000. You are
required to find out the rate of depreciation.
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Answer:
Depreciation = cost - scrap value/life
= 25000-5000/10=2000
rate of depreciation = amount of depreciation / cost
= 2000/25000×100= 8%
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