2.3 - Book Value and Salvage Value Considerations
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Practice Questions
Test your understanding with targeted questions
Define 'salvage value'.
💡 Hint: Consider what an asset is expected to be worth after it's no longer usable.
What is book value?
💡 Hint: Think of it as the net worth of the asset.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does SYD stand for?
💡 Hint: Think about how years are used in the calculation.
True or False: DDB considers salvage value when calculating depreciation.
💡 Hint: Recall how DDB operates during its calculations.
1 more question available
Challenge Problems
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A factory purchases a machine for ₹15,000,000, with a salvage value of ₹1,500,000, and a life expectancy of 10 years. Calculate the depreciation for the first three years using SYD.
💡 Hint: Remember to sum the digits first!
If a company decides to switch from DDB to straight-line after year 5 because of low book value, detail the necessary steps for the transition.
💡 Hint: Think about how to find the accurate book value first at the end of year 5.
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