1.1 - Introduction to Economic Life
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
Define economic life.
💡 Hint: Think about the concept of when it's most economical to use a machine.
What happens to costs after the economic life of a machine?
💡 Hint: Consider what occurs as a machine ages.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is economic life?
💡 Hint: Think about when it’s best to use a machine.
True or False? As a machine ages, its obsolescence cost decreases.
💡 Hint: Consider how new technology impacts older equipment.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A construction company has a bulldozer with an initial cost of 50,00,000. If its maintenance costs increase by 10% each year and depreciates at a flat rate of 4,00,000 a year, when should they consider replacing it to minimize total costs?
💡 Hint: Consider both increasing maintenance costs and decreasing value.
Evaluate the impact of inflation on the decision to replace equipment worth 30,00,000 with an expected inflation of 5% annually over the next five years. What will be the price of the new machine in five years?
💡 Hint: Use the formula for future value calculations.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.