Mineral Economics, Mine Planning, Systems Engineering · Mineral Economics · 1 mark · Numerical answer
A screw compressor costs ₹21, 00, 000 and has 15-year life. Under sum-of-years-digits depreciation, the fourth-year charge is ₹2, 00, 000. Find salvage value in rupees, to one decimal.
The sum of year digits is 15×16/2=120. The fourth-year multiplier is (15−4+1)/120=12/120=0.1. If salvage is S, 0.1(2100000−S)=200000. Thus depreciable value is ₹2000000 and S=₹100000.0. The charge is for year four, not the cumulative four-year depreciation.
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