alleryStart learning →A machine costs 16,000 and its residual value after 4 years is 1,000. The reducing balance rate is?
A40%
B60%
C50%
D25%
Answer & Solution
Correct answer: C. 50%
Rate = 1 minus the fourth root of (1,000/16,000); the fourth root of 1/16 is 1/2, so the rate is 50%.
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