5.4 - Implications of Cash Flow Timing
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Practice Questions
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What is depreciation?
💡 Hint: Consider how assets lose worth.
What would you calculate if the book value is 28 lakh?
💡 Hint: Remember the depreciation formula.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for calculating depreciation?
💡 Hint: Think about how depreciation is typically calculated.
True or False: The economic life of a machine is the period in which it incurs the highest operating costs.
💡 Hint: Consider when it's no longer cost-effective to maintain.
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Challenge Problems
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You have a machine valued at 35 lakh initially which also depreciates at 0.4. Calculate its book value after two years considering the annual operating cost is 15 lakh.
💡 Hint: Calculate year by year.
Discuss why it is beneficial to re-evaluate machinery every few years regarding the maximum profit method.
💡 Hint: Consider profit trends over time.
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