6 - Total Cost of Equipment
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating annualized cost from the initial cost?
💡 Hint: Consider the components: Initial cost, interest rate, and number of years.
How do you calculate the salvage value of equipment?
💡 Hint: Remember, it's a fraction of the initial cost.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the annualized cost formula?
💡 Hint: Focus on how future payments relate to present costs.
True or False: Salvage value is always a fixed percentage of the initial cost.
💡 Hint: Think about how salvage relates to initial investment.
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Challenge Problems
Push your limits with advanced challenges
An organization is estimating the annual cost of a heavy-duty truck with an initial cost of ₹1,20,00,000, a salvage value of 15% after 15 years with an interest of 10%. Calculate the total annual cost of ownership including depreciation.
💡 Hint: Use the formulas for annualized costs and salvage values.
A construction firm has a crane costing ₹90,00,000. After 10 years, it has a salvage value calculated at 10% of its initial cost. If the firm operates the crane for 1,200 hours annually, what is the hourly cost of operation, including depreciation and salvage value?
💡 Hint: Deduct the salvage value and divide by operating hours.
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