A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs______________?
Correct answer: C
Explanation
Annual depreciation is calculated as (Initial Cost - Salvage Value) / Service Life. So, (5000 - 1000) / 5 = 4000 / 5 = Rs. 800.