5.2 - Determining Economic Life
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Practice Questions
Test your understanding with targeted questions
What is the economic useful life of a machine?
💡 Hint: Think about cost and profit balance.
Define downtime in equipment management.
💡 Hint: Consider what happens when a machine breaks down.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main purpose of determining the economic useful life of a machine?
💡 Hint: Think about why businesses strive to make informed financial decisions.
True or False: Downtime does not affect the operational cost of machinery.
💡 Hint: Consider what happens when machinery is not working.
2 more questions available
Challenge Problems
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A company spends $200,000 on an excavator that has a lifespan of 10 years. Calculate the economic life if maintenance costs rise significantly after year 6. When should they consider replacement?
💡 Hint: Consider both the cost of maintenance and potential earnings.
During a downtime analysis, a machinery operator finds that a truck becomes idle when an excavator breaks down. How should they analyze the costs incurred due to this downtime?
💡 Hint: Consider total costs associated with idle equipment and lost production.
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