Practice Cost Of Investment (1) - Cost of Investment - Construction Engineering & Management

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9 questions

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4 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is the cost of investment?
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Think about both loans and company assets.
Question 2.
Name one method used to calculate the cost of investment.
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One considers present value while the other looks at averages.
3Question 3.
What does the cost of investment encompass?
- Only purchase price
- Interest on loans
- Both purchase price and potential returns
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Think of both borrowing and using company funds.
4Question 4.
Is the time value method considered more accurate than the average annual investment method?
- True
- False
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Reflect on how cash flows can vary.
Question 5.
An equipment is purchased for $150,000, with an estimated salvage value of $15,000. Calculate the depreciation cost per year over its 15-year life using straight-line depreciation.
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Use the straight-line depreciation formula.
Question 6.
If a machine’s average annual investment is $50,000 and its insurance is 3%, calculate the yearly insurance cost.
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Remember to multiply the percentage by the average annual investment.

5 more questions in this section. Enroll free to practise them all.