3.1.1 - Depreciation Calculation
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating depreciation using the straight-line method?
💡 Hint: Think about the basics of how value decreases over time.
What is salvage value?
💡 Hint: Consider what you expect to get after you've used the equipment.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What method is primarily used for estimating depreciation in this section?
💡 Hint: Recall the method discussed in class.
True or False? The Peurifoy method involves consideration of time value in its calculations.
💡 Hint: Think about what the 'time value of money' concept means.
1 more question available
Challenge Problems
Push your limits with advanced challenges
An excavator has an initial price of $300,000, a salvage value of $20,000, and a recommended useful life of 10 years with a tire cost of $15,000. Calculate the yearly depreciation and discuss the factors impacting this equipment's operating cost.
💡 Hint: Break down the questions and remember to exclude tire costs from ownership cost calculations.
If the fuel cost for a machine operating under heavy loads is expected to be $120 per hour, while under normal conditions it’s $80 per hour, explain how the choice of operating conditions affects the project budget.
💡 Hint: Consider the differences in operational scenarios and their direct financial implications.
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