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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the formula to calculate the cost of investment?
💡 Hint: Think about the basic components needed to determine the investment cost.
Question 2
Easy
Define depreciation in your own words.
💡 Hint: Consider how machines lose value as they are used.
Practice 4 more questions and get performance evaluation
Interactive Quizzes
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What is the formula for calculating the cost of investment?
- Interest Rate × Value of Equipment
- Purchase Price + Salvage Value
- Cost of Maintenance
💡 Hint: Think about what financial costs are involved in machinery ownership.
Question 2
True or False: Depreciation represents the increase in value of machinery over time.
- True
- False
💡 Hint: Reflect on what happens to machinery as it is used.
Solve 1 more question and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
A piece of machinery costs $200,000 with a salvage value of $40,000 and a useful life of 15 years. Calculate the annual depreciation. Why might this figure help in project estimation?
💡 Hint: Always remember to deduct salvage value when calculating depreciation.
Question 2
If a company borrows money to purchase equipment valued at $100,000 at an interest rate of 6%, how much would the company need to account for in annual investment costs?
💡 Hint: Understand how interest rates affect overall investment costs.
Challenge and get performance evaluation