The price of the cellular phone is expected to decline at the rate of 11% annually because of obsolescence. If the current selling price is ?24,000.00, how much will it cost after 5 years? Use the declining balance method
Year | Cost (A) |
Accumulated Depreciation (B) |
Opening NBV C=(A-B) |
Rate (D) |
Depreciation this year E=(CxD) |
Accumulated Depreciation F=B+E |
Closing NBV A-F |
1 | 24,000 | 0 | 24000 | 11% | 2640 | 2640 | 21360 |
2 | 24000 | 2640 | 21360 | 11% | 2349.6 | 4989.6 | 19010.4 |
3 | 24000 | 4989.6 | 19010.4 | 11% | 2091.144 | 7080.744 | 16919.256 |
4 | 24000 | 7080.744 | 16919.256 | 11% | 1861.11816 | 8941.86216 | 15058.13784 |
5 | 24000 | 8941.86216 | 15058.13784 | 11% | 1656.395 | 10598.257 | 13401.7428 |
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