The value of lathe machine depreciates at the rate of 10 % per annum. If the…

Step-by-Step Solution

To calculate the value of the machine after depreciation, we use the formula for reducing balance: A = P * (1 - R/100)^n, where P is the present value, R is the annual rate of depreciation, and n is the number of years.

1. Identify the given values:

   • Present Value (P) = Rs. 160,000

   • Annual Depreciation Rate (R) = 10%

   • Time period (n) = 2 years

2. Calculate the value after 2 years:

   • A = 160,000 * (1 - 10/100)^2

   • A = 160,000 * (1 - 0.10)^2

   • A = 160,000 * (0.90)^2

   • A = 160,000 * 0.81

   • A = Rs. 129,600