Practice Comparison of Depreciation Methods - 3 | 6. Sum of the Years Digit Method | Construction Engineering & Management - Vol 1
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does SYD stand for in depreciation?

💡 Hint: Think about the components considered in depreciation over time.

Question 2

Easy

True or False: The Double Declining Balance method considers salvage value in its calculation.

💡 Hint: Remember how DDB is calculated.

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 primary goal of using depreciation methods like DDB?

  • To enhance cash flow
  • To reduce asset value
  • To maintain accurate accounting

💡 Hint: Think about how depreciation affects taxes.

Question 2

True or False: The total depreciation using SYD will differ compared to straight-line methods when calculated over the same lifespan.

  • True
  • False

💡 Hint: Recall the principle that all methods end up accounting for the same total cost.

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Challenge Problems

Push your limits with challenges.

Question 1

Calculate the depreciation for a machine costing ₹ 1,500,000 over 5 years using the SYD method and provide a year-by-year breakdown.

💡 Hint: Start with total years and decrease dependency on n sequentially.

Question 2

Given a machine with an initial cost of ₹ 1,000,000, salvage value of ₹ 200,000, and a useful life of 8 years, discuss making a switch from DDB to Straight Line in year 6 if DDB depreciation falls below the Straight Line method.

💡 Hint: Analyze year 6 depreciation from both perspectives to justify the switch.

Challenge and get performance evaluation