3.3 - Illustrations for Estimating Economic Life
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Practice Questions
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What is economic useful life?
💡 Hint: Think about the relationship between costs and profits.
Define obsolescence cost.
💡 Hint: It relates to how valuable your equipment stays over time.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the definition of economic useful life?
💡 Hint: Relates to financial performance of the equipment.
True or False: Downtime does not affect the decision to replace machinery.
💡 Hint: Think about how downtime can intensify operational costs.
1 more question available
Challenge Problems
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Given that an excavator has been costing $2,000 in repairs per month due to age, while potential new models cost $60,000, analyze at which point it becomes more economical to replace than to continue repairs.
💡 Hint: Compare total repair costs to the cost of acquiring a new machine.
Develop a flowchart to plan the replacement schedule of an aging machine considering obsolescence and downtime factors. What elements would you include in this chart?
💡 Hint: Use visual elements to organize costs and decision points.
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