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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the operating cost of the Challenger?
💡 Hint: Look for the cost associated with maintaining the Challenger.
Question 2
Easy
What is a sunk cost?
💡 Hint: Think about costs that are irrelevant to future decisions.
Practice 4 more questions and get performance evaluation
Interactive Quizzes
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What is the operating cost of the Defender?
- Rs. 90,000
- Rs. 1,35,000
- Rs. 22,50,000
💡 Hint: Focus on the comparison costs mentioned.
Question 2
True or False: The salvage value of the Challenger is more favorable than that of the Defender.
- True
- False
💡 Hint: Look for the ending values after five years.
Solve 2 more questions and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
Given the Defender's initial cost of Rs. 22,50,000 and a remaining useful life of 5 years, calculate the total cost of ownership if retained and compare it to the Challenger's costs.
💡 Hint: Use total operational cost + next salvage value to ascertain which is lower.
Question 2
Discuss how ignoring sunk costs affects decision-making in a financial context. Provide an example where this principle can be applied outside machinery.
💡 Hint: Consider projects that may require additional funding despite previous spending.
Challenge and get performance evaluation