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Basis of the equal installment method

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A factory machine that costs £4,600,000 is expected to have a life of 5 years and a scrap value of approximately £300,000.

Depreciation is first calculated on the basis of the equal installment method.

Using this method it is expected to depreciate each year by 18.7% of its original value.

Calculate:

(a) the amount of depreciation each year

(b) the book value after 3 years

(c) the total depreciation over the period of the first 3 years

Reference no: EM131067875

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