1 - Cost of Investment
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Practice Questions
Test your understanding with targeted questions
What is the cost of investment?
💡 Hint: Think about both loans and company assets.
Name one method used to calculate the cost of investment.
💡 Hint: One considers present value while the other looks at averages.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the cost of investment encompass?
💡 Hint: Think of both borrowing and using company funds.
Is the time value method considered more accurate than the average annual investment method?
💡 Hint: Reflect on how cash flows can vary.
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Challenge Problems
Push your limits with advanced challenges
An equipment is purchased for $150,000, with an estimated salvage value of $15,000. Calculate the depreciation cost per year over its 15-year life using straight-line depreciation.
💡 Hint: Use the straight-line depreciation formula.
If a machine’s average annual investment is $50,000 and its insurance is 3%, calculate the yearly insurance cost.
💡 Hint: Remember to multiply the percentage by the average annual investment.
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