A machine costing P45,000 is estimated to have a salvage value of P4,350 when retired at the end of 7 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?

A machine costing P45,000 is estimated to have a salvage value of P4,350 when retired at the end of 7 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 6RQ

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Concept explainers

Tax Significance of Depreciation

While calculating taxes, depreciation is the method used to allocate the cost of a tangible or immovable asset over the useful life of an asset. In other words, allocate part of that cost to the times when tangible assets help generate revenue or sales. By recording the depreciation of an asset, depreciation reduces the amount of taxes a company or business pays in tax deductions.

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