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Sagot :
Since Willis uses the straight-line depreciation, the composite depreciation rate will be 13.05%
Using the straight-line depreciation method:
Photocopier = ($12000 - $2000) / 10
Photocopier = $1000
Computer = ($6800 - $1200) / 4
Computer = $1400
Typewriter = ($1500 - $250) / 5
Typewriter = $250
Net depreciation = Photocopier amount + Computer amount + Typewriter amount
Net depreciation = $1000 + $1400 + $250
Net depreciation = $2650
Composite rate = Net depreciation*100 / Accumulated cost of asset)
Composite rate = $2650*100 / ($12000 + $6800 + $1500)
Composite rate = $265,000 / $20,300
Composite rate = 13.0541872
Composite rate = 13.05%
In conclusion, since Willis uses the straight-line depreciation, the composite depreciation rate will be 13.05%
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