2.1 - Depreciation Calculation
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Practice Questions
Test your understanding with targeted questions
What is depreciation?
💡 Hint: Think about how assets lose value.
How do you calculate annual depreciation?
💡 Hint: Remember the formula discussed in class.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for calculating depreciation?
💡 Hint: Look for the formula that includes division by useful life.
True or False: Salvage value affects the calculation of depreciation.
💡 Hint: Consider how salvage value is used in the depreciation calculation.
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Challenge Problems
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If a piece of equipment has a purchase price of ₹5 crore, a tire cost of ₹15 lakh, and a useful life of 10 years with a salvage value of ₹20 lakh, calculate the annual depreciation and the hourly depreciation assuming 1600 hours of operation per year.
💡 Hint: Use the formula for annual depreciation and then divide by annual hours of operation.
An excavator has an initial cost of ₹4 crore, working for 2000 hours annually, with a tire cost of ₹10 lakh and an expected useful life of 12 years. Calculate the total hourly cost, assuming 2% insurance, 3% taxes, and 8% interest.
💡 Hint: Break it down into ownership and operating cost to solve.
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