3 - Peurifoy Method
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Practice Questions
Test your understanding with targeted questions
What is depreciation?
💡 Hint: Consider how equipment value changes over time.
What does the time value method account for?
💡 Hint: Think about how cash received today is more valuable than cash received in the future.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main objective of the Peurifoy method?
💡 Hint: Think about how project budgeting relies on accurate cost estimation.
True or False: The average annual investment method considers the timing of cash flows.
💡 Hint: What happens to cash flows over time?
2 more questions available
Challenge Problems
Push your limits with advanced challenges
A construction company purchases an excavator for $150,000 with a salvage value of $30,000 and an estimated life of 10 years. If the excavator is used for 2,000 hours a year, calculate the hourly depreciation.
💡 Hint: Apply the straight-line method, just like we did before.
Discuss the implications of using the average annual investment method compared to the time value method for a construction project with fluctuating cash flows due to seasonal work.
💡 Hint: Think about how timing affects financing in construction projects.
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