1.2 - Methods to Calculate Cost of Investment
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Practice Questions
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Define the term 'Cost of Investment'.
💡 Hint: Consider what it means in terms of capital.
What is depreciation?
💡 Hint: Think about how value decreases with time.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Cost of Investment entail?
💡 Hint: Remember the broader definition of costs.
True or False: The average annual investment method simplifies the complexity of ownership costs.
💡 Hint: Consider the purpose of the method.
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Challenge Problems
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A company buys a loader for 50 lakhs with a 5-lakh salvage value. The useful life is 10 years. Calculate the average annual investment.
💡 Hint: Get the components of initial cost and salvage value correct.
If a machine costs 120 lakhs, with an expected salvage of 15 lakhs, how does its ownership cost influence bid preparation?
💡 Hint: Think about long-term financial planning.
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