Practice References for Further Reading - 6.2 | 18. Depreciation Calculation | Construction Engineering & Management - Vol 1
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References for Further Reading

6.2 - References for Further Reading

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Learning

Practice Questions

Test your understanding with targeted questions

Question 1 Easy

What is depreciation?

💡 Hint: Think about how wear and tear affects value.

Question 2 Easy

How do we calculate depreciation for the first year?

💡 Hint: Remember the initial book value to start your calculation.

4 more questions available

Interactive Quizzes

Quick quizzes to reinforce your learning

Question 1

What is the formula for calculating annual costs?

Annual Cost = Depreciation + Operating Costs
Annual Cost = Book Value - Depreciation
Annual Cost = Operating Costs / Depreciation

💡 Hint: Think about what all expenses a machine incurs each year.

Question 2

True or False: Economic life is the time period when the asset is least productive.

True
False

💡 Hint: Recall the definition of economic life carefully.

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Challenge Problems

Push your limits with advanced challenges

Challenge 1 Hard

A machine costs 30 lakh and has a depreciation rate of 25%. Calculate its book value after 2 years, and explain the significance of this value.

💡 Hint: Use the depreciation formula and adjust for the book value.

Challenge 2 Hard

Discuss the implications of deciding to replace machinery based on annual cost vs. maximum profit method. Provide an example.

💡 Hint: Reflect on examples of machines that may differ in performance and cost metrics.

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Reference links

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