Practice Estimated Annual Cost Comparison - 2.3 | 18. Depreciation Calculation | Construction Engineering & Management - Vol 1
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Knowledge

2.3 - Estimated Annual Cost Comparison

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What formula is used to calculate the first-year depreciation?

💡 Hint: Think about the percentage of the book value.

Question 2

Easy

If a machine was purchased for 28 lakh, what would be its book value at the end of the first year after applying 40% depreciation?

💡 Hint: Subtract the 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 to calculate the first-year depreciation?

  • A) D = Book Value × 0.4
  • B) D = 0.4 × Book Value
  • C) D = Book Value × 0.6

💡 Hint: Focus on the percentage of the book value used in calculations.

Question 2

True or False: Cumulative costs help to assess the better time for machinery replacement.

  • True
  • False

💡 Hint: Think about the cost patterns over several years.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

If a machine purchased at 30 lakh depreciates at 30% annually, calculate its book value after 3 years. After that, assess whether to replace it if the proposed machine's average annual cumulative cost is 18 lakh.

💡 Hint: Calculate each year's depreciation and keep track of annual and proposed costs.

Question 2

You have a loader costing 25 lakh, with varying operating costs. If you find that over the years the average annual cumulative cost aligns closely with revenue generated, how would you approach your next decision on replacement?

💡 Hint: Tracking both revenue generated and costs gives clarity on profitability and makes replacement decisions easier.

Challenge and get performance evaluation