An office machine costing $2000 is being depreciated over 10 years using the constant-percentage method.The book value after 4-years is $480.20.What is the scrap (salvage)value of the machine?

Question

Quizplus · Accepted Answer

The constant-percentage method implies exponential decay. The book value after 4 years is $480.20, and the initial cost is $2000. The depreciation rate can be calculated, and then the scrap value is found by applying this rate over the remaining years to reach the end of the 10-year period. The calculations show that the scrap value is $56.50.

An Office Machine Costing $2000 Is Being Depreciated Over 10