Homework Answers
Answer:
A)
Straight line depreciation rate=1/useful life=1/20=5%
Depreciable base=200000-10000=$190000
Depreciation per year=190000*5%=$9500
Book Value at the end of 10 year=200000-9500*10=$105000
B)
let r be the rate of depreciation
Asset cost A=200000
Then book vale at the end of 10 year under declining balance method= A*(1-r)^10
Since
A*(1-r)^10=105000
200000*(1-r)^10=105000
r=6.24%
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