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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What are the two main methods of calculating investment costs?
💡 Hint: Think about how cash flows are represented over time.
Question 2
Easy
What is the typical range for insurance costs as a percentage of machine value?
💡 Hint: Recall how insurance protects machinery.
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 cost of investment?
- The purchase price of the machine
- The annual cost of capital
- Insurance premiums
💡 Hint: Think about how financing affects costs.
Question 2
True or False: Insurance costs are fixed and do not vary with the value of machinery.
- True
- False
💡 Hint: Recall the variability based on equipment value.
Solve and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
A company buys a machine for ₹75 lakhs, with a salvage value of ₹10 lakhs and a useful life of 8 years. Calculate the annual depreciation using the straight-line method. What would the average annual investment be if the storage cost is 1%, tax is 2%, and insurance is 2%?
💡 Hint: Break down each calculation step for clarity.
Question 2
Discuss the implications of underestimating ownership costs when preparing for a project bid.
💡 Hint: Think of a real-world scenario where budget overruns have occurred.
Challenge and get performance evaluation