2.2 - Annualized Salvage Value Calculation
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Practice Questions
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What is salvage value?
💡 Hint: Think of it as the amount you get back after using an asset.
What is the formula for annualized initial cost?
💡 Hint: Remember what each symbol stands for.
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Interactive Quizzes
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What is the use of the salvage value in financial calculations?
💡 Hint: Think about how you account for the value left after using an asset.
True or False: Annualized costs help estimate budget requirements over time.
💡 Hint: Consider if knowing yearly expenses makes planning easier.
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Challenge Problems
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You are managing a fleet of trucks. One truck costs ₹50,00,000, with an expected salvage value of ₹5,00,000 and a useful life of 10 years. Calculate its annualized total cost assuming an average interest rate of 8%.
💡 Hint: Make sure you handle both values in your calculations.
If the total ownership costs include additional factors like maintenance costs which are 10% of the initial price, calculate the annual maintenance for initial costs of ₹120,00,000.
💡 Hint: Calculate percentages carefully!
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