3 - Operating Cost Estimation
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating depreciation?
💡 Hint: Think about what occurs over the lifespan of an asset.
What are the main components of ownership cost?
💡 Hint: Consider what you would pay for an asset over time.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What component is not typically included in ownership costs?
💡 Hint: Ownership pertains to what you pay for owning the asset.
True or False: The Peurifoy method uses the initial purchase price to determine salvage value.
💡 Hint: Think about how depreciation and salvage value are related.
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Challenge Problems
Push your limits with advanced challenges
A company purchases an equipment for ₹5 crores with an estimated salvage value of 10%. If the useful life of the machine is 15 years, calculate its annual depreciation.
💡 Hint: Subtract the estimated salvage value from the purchase price before dividing.
Calculate the total cost of operation for an equipment where the operating cost is ₹4000 per hour. If the operator wages are ₹600 per hour and the equipment is used for 1600 hours annually, what is the total cost?
💡 Hint: Think about how there's a fixed number of operational hours in a year.
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