4 - Investment Costs
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Practice Questions
Test your understanding with targeted questions
What is economic life?
💡 Hint: Think about the duration of cost-effectiveness!
List one component of investment costs.
💡 Hint: Consider what is included in total costs related to machines.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does economic life refer to?
💡 Hint: It's about when costs are lowest while operating the machine.
True or False: Obsolescence costs increase as technology advances.
💡 Hint: Consider how technology affects value over time.
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Challenge Problems
Push your limits with advanced challenges
A company purchases a machine for 40,00,000 and incurs yearly maintenance costs of 3,00,000 that increases by 5% annually. Calculate the total maintenance cost after three years.
💡 Hint: Remember to apply the 5% increase for each subsequent year.
Discuss how changes in technology might influence the decision to replace a machine with respect to obsolescence.
💡 Hint: Tie this back to how consumer demand impacts machinery value.
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