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Practice Questions
Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is the difference between the defender and the challenger in terms of operating costs?
💡 Hint: Consider the numbers given in the analysis.
Question 2
Easy
What are sunk costs?
💡 Hint: Think about expenses that do not impact future financial 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?
- 90,000
- 1,35,000
- 12,00,000
💡 Hint: Review the section discussing operating costs.
Question 2
True or False: A sunk cost can be recovered when replacing machinery.
- True
- False
💡 Hint: Consider the definition of a sunk cost.
Solve and get performance evaluation
Challenge Problems
Push your limits with challenges.
Question 1
A company has an old machine with total costs of 8,00,000 over 5 years and a new machine with projected costs of 5,00,000. Calculate the EAC for both and determine which is better.
💡 Hint: Use simple division to find annualized costs.
Question 2
Discuss the implications of retaining an outdated machine with lower operating costs but high maintenance costs.
💡 Hint: Reflect on overall lifetime expenses versus short-term savings.
Challenge and get performance evaluation