Practice Depreciation Estimates Comparison - 3.1 | 6. Sum of the Years Digit Method | Construction Engineering & Management - Vol 1
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3.1 - Depreciation Estimates Comparison

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is depreciation?

💡 Hint: Think about how assets lose value.

Question 2

Easy

What does salvage value mean?

💡 Hint: Consider what you would get after disposing of an asset.

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 benefit of using the Double Declining Balance method?

  • Lower overall depreciation
  • Higher early depreciation
  • Consistent annual depreciation

💡 Hint: Consider which method gives more upfront financial benefit.

Question 2

True or False: The Sum of the Years' Digits method ignores the salvage value in calculations.

  • True
  • False

💡 Hint: Think about how calculations are conventionally made.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company purchases machinery worth ₹1,000,000 with a salvage value of ₹100,000 and a useful life of 10 years. Calculate the depreciation for the third year using both SYD and DDB methods.

💡 Hint: Calculate book values carefully for accurate DDB values.

Question 2

Given a machine with an initial cost of ₹1,500,000 and a salvage value of ₹150,000, switching from DDB method to straight line after year 4 because it depreciated too fast, explain the impact on financial statements.

💡 Hint: Consider how switching methods affects overall asset valuation.

Challenge and get performance evaluation