GATE 2026 AR — Planning – Question 26
Furniture costs₹850000 and has 8-year useful life. With annual depreciation 15%, find salvage value in rupees at the end of its life, to the nearest integer.
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Show answer and explanation
Correct answer: 231600 to 231700
Explanation
For constant percentage depreciation, multiply the remaining value by 0.85 each year. The eight-year value is 850000×0.85⁸=₹231616.9463. Rounded to the nearest rupee, salvage value is ₹231617. This declining-balance calculation differs from charging 15% of original cost in every year.