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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the annual operating cost of the defender?
💡 Hint: Refer back to the initial figures provided for each equipment.
Question 2
Easy
Define the term 'sunk cost.'
💡 Hint: Think about costs that do not affect 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 annual operating cost of the challenger?
- 135,000
- 90,000
- 1,200,000
💡 Hint: Reflect on the cost structure provided.
Question 2
True or False: Sunk costs impact future replacement decisions.
- True
- False
💡 Hint: Think about whether these costs can be recovered.
Solve 1 more question and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
If the defender's current market value is 2,250,000, and the operating cost is 135,000 per year, calculate the total cost over five years without considering salvage value.
💡 Hint: Remember to include both the market value and the total operational costs.
Question 2
Assuming both the defender and challenger undergo operational costs over a five-year period, how would you determine the best option among them, including all costs?
💡 Hint: Utilize the EAC formula for both machines and compare the results.
Challenge and get performance evaluation