Question $1$

$1\mathrm{.}1$ Differentiate between the straight line and the declining$-$balance depreciation method. $(5)$

$1\mathrm{.}2$ Differentiate between the book value and the market value.

$1\mathrm{.}3$ A $3$D Industrial machine has a cost basis of R$1200000\mathrm{.}00$ and a $15-$year depreciable life. If the machine has an estimated SV of zero at the end of $15$ years. Calculate the annual depreciation deduction in year $7,$ the cumulative depreciation through the $7$th year and the book value at the end of year $7$ using the DB method when $($i$)$ a $200\%$ DB and $($ii$)$ a $150\%$ DB method is specified.

$1\mathrm{.}4$ If the Industrial machine has a basis of R$1200000$ and is replaced in the ${15}^{th}$ year with a R$100000$ SV$.$ Calculate its depreciation rate per year of use and its BV after $10$ years of operation.

$[$Subtotal $=30$ Marks$]$