A machine is purchased for Mu 40,000.
The estimated life is 15 years. The end-of-life value of this
machine is Mu 5,000. If the rate of interest on depreciation
fund is 5 %, compute annual depreciation fund.
Initial cost (IC) = Mu 40,000
End-of Life value(EOLV) = Mu 5,000
Life (L) = 15 years
R= interest rate = 5/100 = 0.05
Annual depreciation fund = (IC-EOLV)/(L) x r / ([ 1+ rn] -1)
= Mu 1155.55 per year
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