Wilma runs a wedding car service. Business is expanding and she is planning to buy a new vehicle. The basic list price of a new car is £24 400, but Wilma must pay an additional £800 for it to be...

Wilma runs a wedding car service. Business is expanding and she is planning to buy a new vehicle. The basic list price of a new car is £24 400, but Wilma must pay an additional £800 for it to be sprayed white. She purchases the car on 1 March in time for the main spring and summer wedding season. Her year-end is 28 February. Wilma depreciates cars on the reducing balance basis, at 15% per annum.

What will be the depreciation charge for the first year of ownership of the new car?

a) £3 660

b) £3 780

c) £3 540

d) £4 460.