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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 what happens to the value of a car over years.
Question 2
Easy
Calculate the depreciation for a machine valued at 50 lakh with a depreciation rate of 20%.
💡 Hint: Use the formula: Depreciation = Rate × Book Value.
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 depreciation?
- Depreciation = Rate × Book Value
- Depreciation = Book Value - Current Value
- Depreciation = Current Value ÷ Total Years
💡 Hint: Remember the rate's role in determining financial worth.
Question 2
True or False: The minimum cost method focuses on when the annual cost of the old machine is less than that of the new.
- True
- False
💡 Hint: Consider how costs interplay in decision making.
Solve and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
Calculate the cumulative costs over 5 years with a starting annual cost of 20 lakh that increases by 10% each year due to maintenance.
💡 Hint: Remember to use the formula for a growing annuity.
Question 2
Given that average annual profits for a current machine is 4 lakh, calculate when to replace it if the proposed machine's average annual profit is 5 lakh indicating a better investment.
💡 Hint: Project the profits over the machine lifespan to make the best decision.
Challenge and get performance evaluation