1.

Say True or False:The present value of a machine is ₹ 16800. It depreciates @25% p.a. Its worth after 2 years is ₹ 9450.

Answer»

True

Present value of machine = ₹ 16800

Depreciation rate (n) = 25%

Value after 2 years = P (1 – r/100)n 

= 16800 (1 – 25/100)2

= 16800 x (1 – 1/4)2 

= 16800 x 3/4 x 3/4 

= 9450



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