Question
Economics Question on Depreciation
An MRI machine is purchased by a hospital at Rs 27 lakhs with an expected life of 12 years. What will be the value of annual depreciation?
A
27 lakhs
B
2.25 lakhs
C
15 lakhs
D
1.5 lakhs
Answer
2.25 lakhs
Explanation
Solution
Depreciation is calculated using the straight-line method: Rs 27 lakhs / 12 years = Rs 2.25 lakhs per year.