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What is the depreciation rate of a physical asset with the purchase price of $150 000 and salvage value of $16 100 after 10 years of service?

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Final answer:

The depreciation rate of a physical asset purchased for $150,000 with a salvage value of $16,100 after 10 years of service is 8.93% per year.

Step-by-step explanation:

To calculate the depreciation rate of a physical asset, we will use the straight-line depreciation method. First, we need to determine the total amount that will be depreciated over time by subtracting the salvage value from the purchase price. In this case, it would be $150,000 (purchase price) - $16,100 (salvage value) = $133,900 total depreciation. Next, we divide this amount by the number of years of service to find the annual depreciation. Therefore, $133,900 / 10 years = $13,390 annual depreciation. Now, to determine the depreciation rate, we divide the annual depreciation by the purchase price and then multiply by 100 to get a percentage. So, the depreciation rate is ($13,390 / $150,000) * 100 = 8.93% per year.

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