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Mathematics Preparation for SAT
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Directions: Read the following information and answer the question that follows.

Manu opened an internet café on 1st Jan 2003. He invested in 12 computers @ Rs. 25,000 per computer. He also invested in the other infrastructure of the centre a sum of Rs. 1.5 lakh. He charges Rs. 40 per hour from his customers. The depreciation on computers is 20% annually and depreciation on infrastructure is 25% annually. He has to pay a fixed rental of Rs. 7,000 per month and assistant`s salary of Rs. 3,000 per month. Assume a computer works for 12 hours in a day.

If the internet rates per hour have to be dropped to Rs. 20 per hour in the fourth year of operation, what is Manu`s expected profit for the calendar year 2006, assuming an average of 60% occupancy rate for the year?

 
Rs. 3,93,260
Rs. 4,13,220
Rs. 4,23,360
Rs. 4,63,222

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Pradeep

Why are we taking depreciation value? and even if we are why the depreciation of previous years not taken?

Chayan

I didnt understand it. Some please explain it the depreciation part.