Practice Comparison of Maximum Profits - 3.4 | 18. Depreciation Calculation | Construction Engineering & Management - Vol 1
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3.4 - Comparison of Maximum Profits

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Calculate the first-year depreciation for a machine worth 20 lakh with a depreciation rate of 40%.

💡 Hint: Use the formula D = 0.4 × Book Value.

Question 2

Easy

What is the book value at the end of the first year for a machine purchased at 30 lakh with a depreciation of 12 lakh?

💡 Hint: Subtract first-year depreciation from the purchase price.

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 formula for calculating depreciation?

  • D = Cost × 0.4
  • D = 0.4 × Book Value
  • D = Book Value - Cost

💡 Hint: Remember how depreciation affects the asset over time.

Question 2

True or False: The cumulative cost is the total of all costs incurred over a specified period.

  • True
  • False

💡 Hint: Think about what cumulative means in financial terms.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has machinery with an original cost of 1 crore and operates in a sector where usage affects productivity significantly. Each year, the machine loses 50,000 in value due to inefficiencies. Calculate the potential payback period if the annual profit generated at start is 12 lakh and this decreases by 10% every year.

💡 Hint: Keep track of cumulative profits and evaluate against initial costs to identify when payback occurs.

Question 2

Evaluate the impact of switching from a machine with high maintenance costs but lower initial costs to a newer model with lower maintenance but higher upfront costs. What factors should the decision-makers consider?

💡 Hint: Discuss the benefits of balancing upfront investments versus long-term savings.

Challenge and get performance evaluation