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A car costing ₹ 5,00,000 has a useful life of 15 years. The estimated scrap value is ₹ 50,000. The annual depreciation using the straight line method is

Solution

✅ Correct Option: 3

Straight line depreciation =cost−scrap valueuseful life= \dfrac{\text{cost} - \text{scrap value}}{\text{useful life}}.

=500000−5000015=45000015== \dfrac{500000-50000}{15} = \dfrac{450000}{15} = Rs. 30,000 per year.

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