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An excavator is purchased for Rs. 20,00,000 and has a useful life of 8 years with no residual value. What will be its book value after 3 years if the general double declining balance depreciation method is applied?

Construction Planning and Management MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Construction Planning and Managementcivil-engineering-mcqs › construction-planning-and-management
Published
19 Jan 2019
Last updated
28 May 2026

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Explanation

Using the general double declining balance method, depreciation rate = 2 × (1/8) = 25% per year. Year 1 book value = 20,00,000 × (1 - 0.25) = 15,00,000 Year 2 book value = 15,00,000 × (1 - 0.25) = 11,25,000 Year 3 book value = 11,25,000 × (1 - 0.25) = 8,43,750 Therefore, the book value after 3 years is Rs. 8,43,750.

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