7 - Conclusion of Lecture 8
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Practice Questions
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What is the operating cost of the challenger?
💡 Hint: Refer to the cost comparison section.
Define sunk cost.
💡 Hint: Think of costs that have already been incurred.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the operating cost of the defender?
💡 Hint: Review the cost section to find the defender’s operating costs.
True or False: Sunk costs must be considered in replacement analysis.
💡 Hint: Consider if past costs affect future strategies.
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Challenge Problems
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If the defender has an annual operating cost of ₹1,35,000 and a salvage value of ₹6,00,000 after 5 years, calculate the EAC assuming an interest rate of 10%. Is keeping it financially viable over the next 5 years?
💡 Hint: Apply interest factors and calculate numerical values.
Debate whether sunk costs should play any role in equipment replacement suggestions. Create arguments for why they should or shouldn't.
💡 Hint: Think about how each affects future decisions.
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