4.3 - Interest on Investment
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Practice Questions
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What are ownership costs?
💡 Hint: Consider costs that are fixed annually.
Name one method of calculating depreciation.
💡 Hint: It spreads the value loss evenly over time.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What are the two main components of equipment costs?
💡 Hint: Think about costs associated with usage and ownership.
True or False: Depreciation is only a physical cash flow.
💡 Hint: Consider how depreciation is recorded in financial statements.
1 more question available
Challenge Problems
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Calculate the total depreciation after three years for equipment purchased at $90,000 with an expected salvage value of $15,000 over a useful life of 10 years using the straight-line method.
💡 Hint: Use the depreciation formula for annual depreciation.
If a piece of machinery's initial cost is $75,000, and using the sum-of-the-years' digits method, how much depreciation will be recorded in the first year if the expected life is 5 years?
💡 Hint: Remember to calculate the sum of the years for the digits method.
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