1 - Depreciation Calculation
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Practice Questions
Test your understanding with targeted questions
Calculate the depreciation for a machine valued at 50,000 with a depreciation rate of 0.4.
💡 Hint: Use the formula D = P × r.
What does book value represent?
💡 Hint: Think about how depreciation affects asset value.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for calculating depreciation?
💡 Hint: Think of how we previously calculated the first year's depreciation.
Does the book value increase over time?
💡 Hint: Recall our definition of book value.
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Challenge Problems
Push your limits with advanced challenges
You have a piece of equipment that costs 500,000, with a depreciation rate of 30%. Calculate the book value after 4 years assuming straight-line depreciation.
💡 Hint: Calculate yearly depreciation and subtract from the original cost.
A machine has an operational cost of 20,000 per year and a maintenance cost of 5,000. If the depreciation is 25,000 each year, how long can this machine be economically viable before replacement is needed?
💡 Hint: Look for cumulative costs exceeding those of a new machine.
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