Question
A company has two machines: Machine A and Machine B.
Machine A was bought for 75,000, and Machine B for 50,000. If the value of Machine A depreciates by 20% and the value of Machine B appreciates by 15%, what is the difference between the new values of Machine A and Machine B?Solution
Original cost of Machine A = 75,000 Original cost of Machine B = 50,000 Value of Machine A after 20% depreciation = 80% of 75,000 = 60,000 Value of Machine B after 15% appreciation = 115% of 50,000 = 57,500 Required difference = 60,000 - 57,500 = 2,500
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