A machine costing Rs.2,00,000 has a useful life of 5 years. The estimated scrap value is Rs.20,000. By using straight line method, the annual depreciation is

Rs.36,000

The correct answer is Option (3) → Rs.36,000 **

Cost of machine = Rs. 2,00,000

Scrap value = Rs. 20,000

Useful life = 5 years

Annual depreciation (Straight Line Method):

$\text{Depreciation per year} = \frac{\text{Cost} - \text{Scrap value}}{\text{Life}}$

$= \frac{200000 - 20000}{5}$

$= \frac{180000}{5}$

$= 36000$

Annual depreciation = Rs. 36,000