1.3 - Annual Cost Calculation
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Practice Questions
Test your understanding with targeted questions
Calculate the depreciation for a machine worth 50 lakh with a 30% rate.
💡 Hint: Use the formula: Depreciation = Purchase Price × Depreciation Rate.
If a machine's book value is 20 lakh after 2 years with depreciation of 10 lakh, what was its initial cost?
💡 Hint: Add book value and accumulated depreciation to find initial cost.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for depreciation?
💡 Hint: Think about the components that reduce asset value.
True or False: Annual costs should only include depreciation.
💡 Hint: Reflect on all costs associated with machinery use.
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Challenge Problems
Push your limits with advanced challenges
A machine is purchased at 50 lakh with a 35% depreciation rate. Calculate its book value after 3 years if it has constant operating costs of 15 lakh per year.
💡 Hint: Calculate depreciation each year based on the new book value.
If a machine costs 30 lakh and has an annual operating cost of 10 lakh but depreciates down to 5 lakh over 5 years, what is the average annual cumulative cost?
💡 Hint: Think about all costs when determining overall cost.
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