A vehicle costing ₹1,25, 000 has a scrap value of ₹25,000. If the annual depreciation charge is ₹12,500 then the useful life (in years ) of the vehicle is :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 8
Annual Depreciation = $\frac{Cost\,of\,vehicle-Scrap\,value}{Useful\,life}$
$12,500=\frac{1,25,000-25,000}{Useful\,life}$
Useful life = $\frac{100000}{12500}$
Useful life = 8 years