4.1 - Final Equivalent Annual Cost for Defender
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Practice Questions
Test your understanding with targeted questions
What is the annual operating cost of the Challenger?
💡 Hint: Refer to the section where both costs are compared.
Define salvage value.
💡 Hint: Think about how salvage value is used in calculations.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the operating cost of the Defender?
💡 Hint: This cost is explicitly mentioned in the initial comparison.
True or False: Any initial purchase costs should be included in the replacement analysis.
💡 Hint: Think about what sunk costs mean when making financial decisions.
2 more questions available
Challenge Problems
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If the Defender maintained its operating cost but increased its salvage value to ₹7,00,000, how would that affect the EAC in comparison to the Challenger?
💡 Hint: Check how salvage values directly reduce final costs.
Create a scenario where both machines are equally viable, and explain the decision-making process.
💡 Hint: Consider all operational aspects and not just cost.
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