Practice Replacement Justification Based on Economic Life - 2.1 | 18. Depreciation Calculation | Construction Engineering & Management - Vol 1
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Knowledge

2.1 - Replacement Justification Based on Economic Life

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is depreciation?

💡 Hint: Think about how assets lose value as they are used.

Question 2

Easy

How do you calculate annual cost?

💡 Hint: Remember, total cost includes all expenses for the year.

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 primary purpose of calculating depreciation?

  • To determine legal value
  • To track value loss over time
  • To predict future earnings

💡 Hint: Consider the function of depreciation in financial terms.

Question 2

True or False: The book value decreases annually.

  • True
  • False

💡 Hint: Think about how wear affects market value.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company uses a loader that costs 2.5 million rupees initially. After 7 years, its annual operating cost rises to 1 million rupees with a depreciation at 30%. Calculate its current book value and whether it should be replaced.

💡 Hint: Remember to figure the cumulative operating cost before making a decision.

Question 2

If you find that replacing an old machine increases productivity significantly, yet the new machine's costs are higher annually than the cumulative cost of the old, how does your decision change?

💡 Hint: Consider long-term gain versus short-term savings.

Challenge and get performance evaluation