# Solution: What is the annual rate of depreciation of the machine in percentage?

A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?

#### Problem Statement: CE Board November 1995

A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?

• A. 25%
• B. 26%
• C. 27%
• D. 28%

The annual rate of depreciation of the machine is 25%.

Solution:

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