5.1 - Intuitive Method and its Comparison
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Practice Questions
Test your understanding with targeted questions
What is the depreciation for a machine costing 28 lakh with a rate of 40%?
💡 Hint: Multiply the cost by the depreciation rate.
How is book value at the end of the first year calculated?
💡 Hint: Book value = Cost - Depreciation.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the first-year depreciation for a loader costing 28 lakh at a 40% rate?
💡 Hint: Use the formula: Depreciation = Cost x Rate.
The economic life of a machine is determined when...
💡 Hint: Consider the trends of costs over the years.
1 more question available
Challenge Problems
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If a company has a loader with a current value of 10,50,000 after several years of depreciation, calculate the expected savings if a new loader that costs 15 lakh will reduce operating costs by 20% annually over 5 years.
💡 Hint: Account for both the depreciation of the new and old loaders in the overall cost-benefit analysis.
Analyze the trend in cumulative costs for a machine over four years if the annual costs are 25,00,000; 20,50,000; 15,00,000; 22,50,000 respectively. When should the decision to replace be expected based on minimizing those cumulative costs?
💡 Hint: Plot the costs on a graph to visualize the trend for clearer analysis.
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