3 - Costs Associated with the Machine
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Practice Questions
Test your understanding with targeted questions
What does 'economic life' refer to?
💡 Hint: Think about the time when a machine is most beneficial to keep.
What is downtime cost?
💡 Hint: Reflect on the times the machine cannot work due to repairs.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is economic life?
💡 Hint: Focus on the benefits of owning machinery over time.
True or False: Obsolescence costs refer to the depreciation of older machines only.
💡 Hint: Think of how new models affect older machines.
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Challenge Problems
Push your limits with advanced challenges
A company has a machine that costs 2,00,000 per year to maintain after the first year. If inflation is projected to be 5% annually, calculate the maintenance budget for the next five years.
💡 Hint: Adjust each year's cost by multiplying the prior year's cost by 1 plus the inflation rate.
Calculate how obsolescence affects a machine's resale value if its current market worth is 25,00,000, but newer models cause a depreciation of 30%. What’s the expected value?
💡 Hint: Think of how quickly technology advances and what that does to older models.
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