CIMA BA3 · Chapter 10 · Question 1 of 10
A machine costs $48,000 and is expected to have a residual value of $6,000 at the end of its useful life of 6 years. What is the annual depreciation charge using the straight-line method?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $7,000
Explanation
Annual depreciation = (cost - residual value) / useful life = ($48,000 - $6,000) / 6 = $7,000.
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