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Practice Questions
Test your understanding with targeted questions related to the topic.
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.
Practice 4 more questions and get performance evaluation
Interactive Quizzes
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
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.
Solve and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
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.
Question 2
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.
Challenge and get performance evaluation