Question

Depreciation per hour of Rs 8,00,000/- tractor working 1000 hours per year for 10 years is

• A. Rs. 36
• B. Rs. 72
• C. Rs. 144
• D. Rs. 288

Hint:

(Cost - 10%)/Total Hours. It’s the simplest way to calculate how much value your machine "loses" every hour it works.

Answer 1

The Correct Option is B

Step 1: Concept
Depreciation is the reduction in the value of an asset over time due to wear and tear.

Step 2: Meaning
Using the straight-line method, Depreciation = (Purchase Price - Salvage Value) (Useful Life). Salvage value is typically assumed as 10% of the cost.

Step 3: Analysis
Cost = 8,00,000; Salvage Value = 80,000. Total Depreciation = 7,20,000. Total working hours = 10 years $\times$ 1000 hours/year = 10,000 hours.

Step 4: Conclusion
Depreciation per hour = 7,20,000 10,000 = Rs. 72.
Final Answer: (B)