Question

An income tax assessee depreciates the machinery of his factory by 20% in each of the first two years and 40% in the third year. How much average depreciation relief should he claim from the taxation department?

A 37.6% Correct Answer Incorrect Answer
B 33.5% Correct Answer Incorrect Answer
C 27% Correct Answer Incorrect Answer
D 34% Correct Answer Incorrect Answer
E 39% Correct Answer Incorrect Answer

Solution

l 1+L 0.2 0.8 0.2 0.8 0.4 0.6 Average (1+r) = [0.8×0.8 × 0.6]1/3 log 1+r = 1/3 log [0.384] log 1+r = 1/3×1.5843 log l+r = 1/3 ×0.4157 log l+r = 0.13856667 Anlog [log(1+L)] = Anlog [0.13856667] 1+L = 1.376 L = 1.376 - 1 L = 0.376

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