3 - Maximum Profit Method Analysis
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Practice Questions
Test your understanding with targeted questions
What is the first year's depreciation for a machine valued at 28 lakh with a depreciation rate of 40%?
💡 Hint: Use the formula: Depreciation = Rate × Book Value.
How do you calculate the cumulative profit?
💡 Hint: Consider previous annual profits to find the total.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the first step in calculating annual costs for a loader?
💡 Hint: Think about the costs involved in asset management.
True or False: The economic life of a machine is the point at which its profit begins to decline.
💡 Hint: Consider what happens over time with machine performance.
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Challenge Problems
Push your limits with advanced challenges
A factory has an old loader with an annual cost of 20 lakh and a revenue of 25 lakh for three consecutive years. If the new loader can generate a revenue of 30 lakh yearly, should the factory replace its old loader immediately?
💡 Hint: Compare projected profits over the next few years for each option.
The current loader's average cumulative profit has plateaued. If its maximum profit is 5 lakh per year, but the proposed loader could generate 8 lakh per year, should it be replaced immediately?
💡 Hint: Consider future financial benefits in making the decision.
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