Calculate the rate of depreciation for the asset with the help of given data.?
Cost of the asset Rs1,20,000
Residual value Rs40,000
Expected life 5 years
To calculate the rate of depreciation for the asset, we can use the formula:
Rate of Depreciation = (Cost of the asset - Residual value) / Expected life
Given:
Cost of the asset = Rs1,20,000
Residual value = Rs40,000
Expected life = 5 years
Now, let's substitute the values into the formula:
Rate of Depreciation = (1,20,000 - 40,000) / 5
Rate of Depreciation = 80,000 / 5
Rate of Depreciation = Rs16,000 per year
Therefore, the rate of depreciation for the asset is Rs16,000 per year.