Allied & ICAR Exam Bank • ALLIED_0233 NAT • 2 Marks

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

A seed drill purchased for ₹80,000 has an expected useful life of 10 years and a salvage value of $10\%$ of purchase price. Using the straight-line method, annual depreciation in ₹ is:

Answer Key:

7200

Step-by-Step Solution & Explanation

Salvage value $= 0.10 \times 80000 = ₹8,000$. Annual depreciation $= (80000 - 8000)/10 = 72000 / 10 = ₹7,200$.
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