A piece if equipment that costs Rs 25000 has an estimated useful life of 8 years and Rs 0 scrap value. Find the annual depreciation using linear method.
Answer & explanation
Correct answer: option 4
The correct answer is option (4) : ₹3125
Original cost of equipment = ₹25000
Scrap value of equipment = ₹0
Useful life = 8 years
∴ Annual depreciation $=\frac{25000-0}{8}$
$= ₹ 3125$