Annual depreciation as per straight line method, is calculated by__________?
Correct answer: B. the capital cost minus the salvage value, is divided by the number of years of life
- A. the capital cost divided by number of year of life
- B. the capital cost minus the salvage value, is divided by the number of years of life
- C. increasing a uniform sum of money per annum at stipulated rate of interest
- D. none of the above
Explanation
Straight-line depreciation spreads the depreciable amount uniformly over the plant life. The depreciable amount is capital cost minus salvage value, divided by the number of years.
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