Question

The cost of equipment rs 600000 is depreciated at the rate of 15% first year, 13.5% second year, 12% thrid year and so on. find the value of the equipment after 10 years

Answer 1

Cost-Depreciation=NBV
1st  600000-(15%*6000000)=510000
2nd 510000-(13.5%*600000)=429000
3th  429000-(12%*600000) =3570000
4th  357000-(12%*600000) =285000
5th  285000-(12%*600000) =213000
6th  213000-(12%*600000) =141000
7th  141000-(12%*600000) =69000
8th   69000-(12%*600000)   =-3000
9th -3000-(12%*600000)   =-75000
10th -75000-(12%*600000)  =-1470000

On the 8th year the equipment's Net Book Value becomes negative and the equipment is obsolete from this year.