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Test your understanding with targeted questions related to the topic.
Question 1
Easy
What does EAC stand for?
💡 Hint: Think about breaking down total costs into annual terms.
Question 2
Easy
Why is market value more important than initial cost?
💡 Hint: Consider what a buyer cares about.
Practice 4 more questions and get performance evaluation
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What does EAC help determine in equipment management?
💡 Hint: Think about the cost over time.
Question 2
True or False: Sunk costs should influence future replacement decisions.
💡 Hint: Consider if past expenditures matter.
Solve 1 more question and get performance evaluation
Push your limits with challenges.
Question 1
A machine has an initial cost of 40,00,000 with an expected life of 6 years. The operating costs are projected to increase from 3,00,000 in year 1 to 5,00,000 in year 6. Calculate the EAC and determine if it should be replaced.
💡 Hint: Focus on calculating EAC year by year.
Question 2
Discuss the effect of failing to account for market value when analyzing equipment replacement.
💡 Hint: Consider how historical costs differ from current realities.
Challenge and get performance evaluation