A machine costs ₹2,00,000, has a residual value of ₹20,000 and a useful life of 10 years. What is the yearly depreciation by the linear method?

Explanation

1. 01

   Linear depreciation is (cost − residual value) ÷ useful life.

2. 02

   $\frac{2{,}00{,}000 - 20{,}000}{10} = 18{,}000$ rupees a year.