Practice Book Value Calculation For First Year (1.1) - Depreciation Calculation

Practice: Book Value Calculation for First Year

Lesson 1.1Depreciation Calculation

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9 questions

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3 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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6 sample questions

Question 1.
What is the initial book value of the machine?
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Remember the purchase price of the machine.
Question 2.
Calculate the first year depreciation for a machine costing 28,00,000.
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Use the formula: Depreciation = 0.4 x Book Value.
3Question 3.
What is the first year depreciation calculated based on a machine with a book value of 28,00,000 rupees?
- 8,00,000
- 11,20,000
- 12,00,000
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Use the provided formula for depreciation.
4Question 4.
The book value at the end of the first year is?
- True
- False
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Review how book value is calculated.
Question 5.
If a machine that had an initial value of 28,00,000 rupees has annual operational costs rising by 10% each year, and depreciation remains constant, calculate how long until operating costs exceed depreciation.
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Consider performing a year-by-year evaluation for clarity.
Question 6.
Explain the difference in decision-making between minimum cost and maximum profit methods in machinery replacement.
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Use scenarios to illustrate when to implement each method.

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