5.2 - Future Salvage Value and Sinking Fund Factor
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Practice Questions
Test your understanding with targeted questions
What is the use of the Uniform Series Capital Recovery Factor?
💡 Hint: Think about how businesses plan their finances.
Define the Sinking Fund Factor.
💡 Hint: What do we want to save for in the future?
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the Uniform Series Capital Recovery Factor calculate?
💡 Hint: Think of cash as money going OUT.
True or False: The Sinking Fund Factor is used to determine how much to save annually for future expenditures.
💡 Hint: Think about your savings for a new car in the future.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
You have a machine that costs $250,000 with a life expectancy of 10 years. If you know the salvage value is $40,000, calculate the actual annual costs including depreciation and savings for replacement.
💡 Hint: Don’t forget to consider the time value in your calculation.
A company plans to replace a piece of equipment for which they need $120,000 in 5 years. If they earn 4% interest on their sinking fund, what is their annual contribution?
💡 Hint: Apply the sinking fund formula accurately.
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