Practice Calculating Depreciation - 4.1 | 7. Cost of Investment | Construction Engineering & Management - Vol 1
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Knowledge

4.1 - Calculating Depreciation

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is depreciation?

💡 Hint: Think about what happens to a car's value after a few years.

Question 2

Easy

What are two components of investment costs?

💡 Hint: Consider both borrowed money and money you could have invested.

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 does depreciation refer to?

  • A decrease in asset values over time
  • An increase in asset value
  • Operational costs

💡 Hint: Think about your car's value as it ages.

Question 2

True or False: Investment costs only refer to loans taken for purchasing machines.

  • True
  • False

💡 Hint: Consider if there are other factors to account for.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Calculate the total ownership cost for a piece of machinery with a purchase price of $100,000, salvage value of $10,000, a useful life of 10 years, with investment cost at 7%, insurance at 3%, taxes at 2%, and storage at 1%. Assume the average annual investment method.

💡 Hint: Work systematically through each component and sum them up for total ownership cost.

Question 2

If the average annual investment method gives you an average investment of $45,000 for a machine, and ownership costs account for 12% of that value. What would those ownership costs be?

💡 Hint: You just need to calculate a percentage of the average investment value.

Challenge and get performance evaluation