Practice Finding Book Value at Different Years - 4.2 | 7. Cost of Investment | Construction Engineering & Management - Vol 1
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Knowledge

4.2 - Finding Book Value at Different Years

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define the term 'Cost of Investment'.

💡 Hint: Think about the connection between investment and machinery.

Question 2

Easy

What is depreciation?

💡 Hint: Consider how equipment ages and loses value.

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

Which method accounts for the timing of cash flows in calculating investment costs?

  • Average Annual Investment Method
  • Time Value Method
  • Straight-Line Method

💡 Hint: Consider which method is more precise.

Question 2

True or False: The cost of investment can only be calculated if equipment is purchased with borrowed funds.

  • True
  • False

💡 Hint: Think about different ways of acquiring equipment.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company buys machinery for $500,000 with a salvage value of $100,000 and a useful life of 8 years. Calculate the annual depreciation using the straight-line method.

💡 Hint: Use the difference between the initial cost and salvage value.

Question 2

If an equipment’s average annual investment comes out to be $60,000, and the total ownership costs include depreciation of $15,000, insurance of $3,000, taxes of $1,500, and storage costs of $1,000, calculate the hourly ownership cost based on an annual operating time of 2000 hours.

💡 Hint: Sum all costs and then divide by the annual operating hours.

Challenge and get performance evaluation