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An excavator costs Rs. 20,00,000 and has an estimated life of 8 years. It has no salvage value at the end of 8 years. The book value of the excavator at the end of 3 years using general double declining balance method is

A. Rs. 8,43,750

B. Rs. 8,75,000

C. Rs. 10,50,000

D. Rs. 11,56,250

Answer: Option A


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Comments ( 3 )

  1. Pratiksha Goswami
    Pratiksha Goswami :
    3 years ago

    Cost of asset=20, 00,000
    Useful life= 8years
    Depreciation rate=1/8*100=12.5%
    Double declining balance formula=2*cost of asset*depreciation rate
    1st year=2*2000000*12.5%=500000
    So book value at the end of 1st year= 20L-5L=15L
    2nd year=2*1500000*12.5%=375000
    Book value at the end of 2nd year=15L-3.75L=11.25L
    3rd year=2*1125000*12.5%=281250
    Book value at the end of 3rd year= 11.25L-281250=843750

  2. Varun Sagar
    Varun Sagar :
    4 years ago

    Solve?

  3. SANANDAN NATH
    SANANDAN NATH :
    4 years ago

    DEPRECIATION (D) = {(2/N)*Initial Cost}
    Book Value = Initial Cost - D

    D1 = (2/8)*2000000 =500000
    BV1= 2000000-500000 =1500000
    D2 = (2/8)*1500000=375000
    BV2=1500000-375000=1125000
    D3=(2/8)*1125000=281250
    BV3=1125000-281250=843750

    ANS: A

Related Questions on Construction Planning and Management

If to, tp and tm are the optimistic, pessimistic and most likely time estimates of an activity respectively, the expected time t of the activity will be

A. $$\frac{{{{\text{t}}_{\text{o}}} + 3{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{2}$$

B. $$\frac{{{{\text{t}}_{\text{o}}} + 3{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{3}$$

C. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{4}$$

D. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{5}$$

E. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{6}$$