The depreciation charge is arrived at by using cost-residual value/useful life. In the case of the example for current cost, he divided the cost ($250,000) by useful life (10 years) which gives you $25,000. Residual value was not stated so that is zero.
Thanks for this video help for all students😊
Thanks sir. Good explanation with good examples
13:22 i couldn't understand where 6463 come from anyone can explain?
Annuity Factor = (1-(1+r)raised to the power of -n)/r. r=5%, n=8years. Do this, and you'll get 6.463
@@louisa-johnsonejenavbo9676 thanks for the response!
Where did the depreciation charge come from in calculating the current cost?
The depreciation charge is arrived at by using cost-residual value/useful life. In the case of the example for current cost, he divided the cost ($250,000) by useful life (10 years) which gives you $25,000. Residual value was not stated so that is zero.