If the price of a machinery costing ₹25000 is expected to have a useful life of 4 years and a scrap value of ₹5000. Then the annual depreciation by linear method is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹5000
Cost of machine $=25000$
Scrap value $=5000$
Useful life $=4$ years
Annual Depreciation by linear method
$=\frac{25000-5000}{4}$
$=\frac{20000}{4}$
$=5000$
The annual depreciation is ₹5000.