If a car was bought for ₹11,00,000 and after use, was sold in scrap for ₹2,00,000. The number of useful years if the annual depreciation using straight line method was ₹75,000, is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 12 years
$\text{Cost} = 1100000,\;\; \text{Scrap} = 200000$
$\text{Total depreciation} = 1100000 - 200000 = 900000$
$\text{Annual depreciation} = 75000$
$\text{Useful life} = \frac{900000}{75000} = 12$