3.1. Profit Calculation for Loaders

Try these first

1. 1.

   What is the formula for calculating depreciation?

   Hint

   Think about the percentage applied to the initial price.

2. 2.

   How do you determine the book value at the end of the year?

   Hint

   Remember to subtract the depreciation from the initial value.

3. 3.

   What is the main purpose of calculating depreciation?

   • To assess machine productivity
   • To determine tax rates
   • To understand asset value over time

   Hint

   Think about why businesses track asset value.

4. 4.

   True or False: The economic life of a proposed loader is less than that of an old loader if costs are consistently lower.

   • True
   • False

   Hint

   Compare the cost trends.

5. 5.

   A loader's initial cost is 30,00,000 rupees. If its annual depreciation rate is 30%, calculate the book value after 3 years.

   Hint

   Calculate the depreciation for each year based on the previous year's book value.

6. 6.

   If a loader's operational cost increases by 10% annually and its initial operational cost was 15,00,000, what will be the operational cost in the 4th year?

   Hint

   Increase by 10% each year, use previous values for calculations.