A main frame computer whose cost is Rs. 5,00,000 will depreciate to a scrap value of Rs. 50,000 in 5 years. Using the linear depreciation, the book value of the computer at the end of 3 years will be :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 2,30,000
In linear (straight line) depreciation the same amount is written off every year:
\( \displaystyle \text{annual depreciation} = \frac{\text{cost} - \text{scrap value}}{\text{life}} = \frac{500000 - 50000}{5} \)
\(= 90000\)
\(\text{depreciation in 3 years} = 3 \times 90000 = 270000\)
\(\text{book value} = 500000 - 270000 = 230000\)
So the book value after 3 years is Rs. 2,30,000.
Why the other options are incorrect
Option (1) Rs. 90,000 — Incorrect. This is the depreciation for one year.
Option (2) Rs. 1,80,000 — Incorrect. This is the depreciation for two years.
Option (3) Rs. 2,70,000 — Incorrect. This is the total depreciation in 3 years, not the value left.
CBSE Applied Mathematics (Class XII):
Depreciation
