Using straight line method annual deprecation D is equal to:
1). \(\frac{{Original\;cost - life\;in\;year}}{{Scrap\;value}}\)
2). \(\frac{{Original\;cost - Scrap\;value}}{{life\;in\;year}}\)
3). \(\frac{{Life\;in\;year - Scrap\;value}}{{Original\;cost}}\)
4). \(\frac{{Scrap\;value - Life\;in\;year}}{{Original\;cost}}\)
Method of Depreciation
Straight Line Method a fixed amount of original cost is lost every year and is deducted from the original cost as long as the useful service life and salvage value remain unchanged. Thus, at the end of the utility period only the salvage value remains.
$(Annual\;Depreciation\;\left( D \right) = \frac{{Original\;cost\;-\;Salvage\;value}}{{Life\;in\;years}}\;)$
Method of Depreciation
Straight Line Method a fixed amount of original cost is lost every year and is deducted from the original cost as long as the useful service life and salvage value remain unchanged. Thus, at the end of the utility period only the salvage value remains.
$(Annual\;Depreciation\;\left( D \right) = \frac{{Original\;cost\;-\;Salvage\;value}}{{Life\;in\;years}}\;)$
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