A reactor with an initial cost of Rs. 80,000 and a salvage value of Rs. 10,000 is expected to last for 10 years. If the annual interest rate is 10%, what will be the book value of the reactor after 5 years using the sinking fund depreciation method?

Plant-Economics MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Plant-Economicschemical-engineering › plant-economics
Published
12 Feb 2019
Last updated
28 May 2026

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Explanation

Using the sinking fund depreciation method, the annual depreciation amount is accumulated with interest at 10%. After 5 years, the accumulated depreciation subtracted from the original cost results in a book value of Rs. 60,196.

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