Engineering Board Exam Reviewer · Depreciation: Straight Line and Sinking Fund Methods · hard

A machine costs P150,000 with zero salvage value and a life of 10 years. Using the sinking fund method at 6% interest, find the annual depreciation charge.

  1. P11,381.66
  2. P15,000.00
  3. P10,000.00
  4. P12,500.00

Answer

A. P11,381.66

Solution

d= ( Cost- Salvage),i(1+i)n-1= 150000(0.06)(1.06)10-1 P11,381.66.

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