A car costs £10,000 and it has a depreciation policy of 15% each year, reducing balance method. what is the net present value at the end of year 3?

Year 1£10,000 * 15% = £1,500 (Depreciation for year 1)£10,000 - £1,500 = £8,500 (Net present value at the end of year 1)
Year 2£8,500 * 15% = £1,275 (Depreciation for year 2)£8,500 - £1,275 = £7,225 (Net present value at the end of year 2)
Year 3£7,225 * 15% = £1,083.75 (Depreciation for year 3)£7,225 - £1,083.75 = £6,141.25 (Net present value at the end of year 3)

Related Accounting A Level answers

All answers ▸

What is depreciation and what are the 2 methods of depreciating non-current assets?


“Provision for depreciation is made to provide funds for replacement of a fixed assest” discuss this statement (6 marks)


What is depreciation? Why is its calculation necessary? Give an example of straight line depreciation.


Raya has decided to depreciate her fixed assets. She has a printing press which was worth £500 at cost and is estimated to depreciate in value at 15% a year, Reducing balance method. Calculate the NBV at the end of year 3. Showing your working out.


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences