5 - Economic Useful Life
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Practice Questions
Test your understanding with targeted questions
What does economic useful life refer to?
💡 Hint: Think about the relationship between cost and productivity.
Define the terms defender and challenger in the context of equipment management.
💡 Hint: Consider which machine is currently in operation.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is meant by economic useful life?
💡 Hint: Consider what time frame maximizes profitability.
True or False: The defender is the machine that is being considered for replacement.
💡 Hint: Identify which term applies to the existing equipment.
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Challenge Problems
Push your limits with advanced challenges
A company has two excavators: Excavator A has been in service for eight years and has increasing repair costs. Excavator B is a new model that offers 20% more efficiency. How would you decide whether to replace Excavator A with Excavator B?
💡 Hint: Consider not just the immediate costs, but long-term productivity.
If the inflation rate is 2% per year and the purchase price of new equipment is expected to rise, how will this affect the economic useful life decision in the next five years?
💡 Hint: Evaluate how future costs will impact the balance sheet.
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