0900-8-eco-1mark

A machinery costs $ 20,000 and has an estimated life of eight years and a scrap value of $ 2,000. What uniform annual amount must be set aside at the end of each of the eight years for replacement if the interest rate is 4%.

• $ 1,953
• $ 2,250
• $ 2,500
• $ 2,898

GATE-CH-2001-2-22-eco-2mark

\(P\) is the investment made on an equipment, \(S\) is its salvage value and \(n\) is the life of the equipment in years. The depreciation for the \(m^{\text{th}}\) year by the Sum-of-Years-Digits method will be

• \(\displaystyle \frac{P-S}{n}\)
• \(\displaystyle 1-\left(\frac{P}{S}\right)^{\frac{1}{m}}\)
• \(\displaystyle \frac{m}{n}(P-S)\)
• \(\displaystyle \frac{2(n-m+1)}{n(n+1)}(P-S)\)

GATE-CH-2017-22-eco-1mark

The cost of a new pump (including installation) is $ 24,000. The pump has a useful life of 10 years. Its salvage value is $ 4000. Assuming straight line depreciation, the book value of the pump at the end of 4^th year, rounded to the nearest integer, is $ _______

• Answer

GATE-CH-1992-20-c-eco-6mark

The plant of a chemical company has an initial worth of Rs. 50 lakhs, and an estimated salvage value of Rs. 2 lakhs in a service life of 8 years.
(i) Given a choice between the straight-line and declining-balance methods of depreciation. Which method would you recommend to save tax and why?
{#1}

(ii) Estimate the book value (in lakhs rupees) of the plant at the end of 4 years for each of the two methods of depreciation.
{#2}

GATE-CH-2005-72-eco-2mark

The original value of an equipment is $ 10000. The salvage value is $ 500 at the end of its useful life period of 5 years. What is the asset value in dollars after two years by textbook declining balance method?

• 3025

• 4010

• 5020

• 6050

GATE-CH-2007-65-eco-2mark

A pump has an installed cost of $ 40,000 and a 10 year estimated life. The salvage value of the pump is zero at the end of 10 years. The pump value (in $), after depreciation by the double declining balance method, at the end of 6 years is

• 4295
• 10486
• 21257
• 37600

GATE-CH-2011-45-eco-2mark

A process plant has a life of 7 years and its salvage value is 30%. For what MINIMUM fixed percentage factor will the depreciation amount for the second year, calculated by declining balance method be EQUAL to that calculated by the straight line depreciation method?

• 0.1
• 0.113
• 0.527
• 0.887

GATE-CH-1987-18-iii-eco-2mark

A piece of equipment has an initial installed value of Rs. 240,000. It is estimated that its useful life period will be 12 years and its scrap value at the end of 12 years will be Rs. 40,000. The depreciation will be charged as a cost by making equal charges each year, the first payment being made at the end of first year. The depreciation fund will be accumulated at an annual interest rate of 12%. At the end of the life period, enough money must have been accumulated to account for the decrease in equipment value. Determine the yearly cost (Rs.) due to depreciation under these conditions.

• Answer

GATE-CH-PI-2015-57-eco-2mark

A machine is bought for $ 2,500,000. The organization follows a declining balance method of depreciation with a depreciation charge of 25%. If the machine is sold at $ 1,750,000 at the end of 2 ^nd year, then the profit on the book, in $, is ________

• Answer

GATE-CH-1988-9-a-iii-eco-1mark

Book value of an equipment is equal to the original price minus --------------------

• Answer