Aneel & Company purchased an equipment for Rs. 700,000/=. The estimated resale value at the end of its useful life is Rs. 60,000/= The Company uses straight line method for computing depreciation. The quarterly depreciation of the equipment is Rs. 20,000/=

REQUIRED: Compute total life in years of the equipment.

8 year

Start with your cost minus the salvage value to get the depreciable base.

Now since your depreciation amount is a quarterly amount take your depreciation amount times 4 to get your yearly depreciation amount.

Now take your depreciable base and divide it by the yearly depreciation amount to get your number of years of useful life.