8.3 - Obsolescence Cost
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Practice Questions
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Define obsolescence cost.
💡 Hint: Think about how machinery's age can affect its financial value.
What are the two types of obsolescence?
💡 Hint: Consider the reasons why a business may find a machine less useful.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does obsolescence cost refer to?
💡 Hint: Recall how aging machinery impacts overall costs.
True or False: Technological obsolescence refers only to wear and tear of machinery.
💡 Hint: Consider both functionality and technology advancements.
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Challenge Problems
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A construction firm decides to continue using outdated cranes despite new models being available. Calculate the potential financial losses incurred if they discover operational costs increase by 30% due to inefficiencies and maintenance from continued use.
💡 Hint: Estimate total costs before and after and consider how many years this could continue.
Create a business plan that takes into account the costs of not replacing older machinery in terms of estimated profit loss and market share decline due to technological obsolescence.
💡 Hint: Consider both quantitative figures and qualitative impacts on market presence.
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