GATE 2024 CH – Question 35
The capital cost of a distillation column is Rs. 90 lakhs. The cost is to be fully depreciated (salvage value is zero) using the double-declining balance method over 10 years. At the end of two years of continuous operation, the book-value of the column, in lakhs of rupees, rounded off to 1 decimal place, is _______
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Correct answer: 57.31 to 57.89
Explanation
The double-declining rate is $\frac{2}{10} = 20\%$ of the book value each year. After two years the book value is $90 \times (1 - 0.2)^2 = 90 \times 0.64 = 57.6$ lakhs.