A machine is purchased for $10,000 and has an expected life of 8 years,at which time its salvage value is $500.What is the book value at the end of six years using the constant percentage method of depreciation?

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The constant percentage method of depreciation, also known as the declining balance method, involves calculating depreciation at a constant rate on the book value at the beginning of each year. To find the rate, we use the formula: $1 - (\frac{Salvage\ Value}{Cost})^{\frac{1}{Life\ of\ the\ Asset}}$. Plugging in the given values: $1 - (\frac{500}{10000})^{\frac{1}{8}}$, we get a depreciation rate. Applying this rate annually for 6 years to the initial cost of $10,000 gives us the book value at the end of six years as $1,057.37.

A Machine Is Purchased for $10,000 and Has an Expected