6 - Final Comparison and Analysis
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Practice Questions
Test your understanding with targeted questions
What is the primary purpose of a replacement analysis?
💡 Hint: Think about cost efficiency.
Define sunk cost.
💡 Hint: Consider expenses that are no longer relevant.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main cost considered when comparing the defender and challenger?
💡 Hint: Think about what costs persist over time.
True or False: The initial purchase price of the defender is relevant in the replacement analysis.
💡 Hint: Consider what influences future costs.
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Challenge Problems
Push your limits with advanced challenges
A defender costs ₹30,00,000, operates on ₹1,20,000 annually, and has a salvage value of ₹4,00,000. A challenger costs ₹20,00,000, operates on ₹80,000 annually, and has a salvage value of ₹6,00,000. Calculate and discuss which option to choose.
💡 Hint: Ensure to factor in salvage properly!
If the economic life of both equipment types extends beyond 5 years, how would this impact your financial analysis?
💡 Hint: Consider the additional years of costs.
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