4.6 - Storage
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Practice Questions
Test your understanding with targeted questions
What are the two main components of equipment costs?
💡 Hint: Think about costs incurred irrespective of usage.
What does the initial cost of equipment include?
💡 Hint: Look for additional costs, not just the price tag.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What are ownership costs?
💡 Hint: Think about the costs that are always present, compared to costs that depend on usage.
True or False: Depreciation is a measure of profit.
💡 Hint: Consider what depreciation represents in financial terms.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A crane has an initial cost of $150,000, a salvage value of $30,000, and a useful life of 10 years. Calculate the annual depreciation using the straight-line method and describe its implications for project bidding.
💡 Hint: What costs should during project bidding?
For a backhoe costing $75,000 with a salvage value of $15,000 over 6 years, calculate the depreciation using both the double declining balance method and the sum-of-the-years-digits method. Discuss which method might be preferred in tax planning.
💡 Hint: Think of how each method affects cash flow in the business.
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