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    Question

    A company buys a machine for ₹12,00,000 and expects to

    use it for 8 years with residual value ₹80,000. Under straight-line method, annual depreciation is:
    A ₹1,40,000 Correct Answer Incorrect Answer
    B ₹1,15,000 Correct Answer Incorrect Answer
    C ₹1,50,000 Correct Answer Incorrect Answer
    D ₹1,35,000 Correct Answer Incorrect Answer

    Solution

    Depreciable amount = Cost − Residual Value = 12,00,000 − 80,000 = ₹11,20,000. Annual depreciation = 11,20,000 / 8 = ₹1,40,000.

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