6.2 - References for Further Reading
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Practice Questions
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What is depreciation?
💡 Hint: Think about how wear and tear affects value.
How do we calculate depreciation for the first year?
💡 Hint: Remember the initial book value to start your calculation.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for calculating annual costs?
💡 Hint: Think about what all expenses a machine incurs each year.
True or False: Economic life is the time period when the asset is least productive.
💡 Hint: Recall the definition of economic life carefully.
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Challenge Problems
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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.
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
Supplementary resources to enhance your learning experience.