Practice Intuitive Method And Its Comparison (5.1) - Depreciation Calculation

Practice: Intuitive Method and its Comparison

Lesson 5.1Depreciation Calculation

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9 questions

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6 sample questions

Question 1.
What is the depreciation for a machine costing 28 lakh with a rate of 40%?
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Multiply the cost by the depreciation rate.
Question 2.
How is book value at the end of the first year calculated?
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Book value = Cost - Depreciation.
3Question 3.
What is the first-year depreciation for a loader costing 28 lakh at a 40% rate?
- 11,20,000
- 10,00,000
- 12,50,000
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Use the formula: Depreciation = Cost x Rate.
4Question 4.
The economic life of a machine is determined when...
- True
- False
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Consider the trends of costs over the years.
Question 5.
If a company has a loader with a current value of 10,50,000 after several years of depreciation, calculate the expected savings if a new loader that costs 15 lakh will reduce operating costs by 20% annually over 5 years.
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Account for both the depreciation of the new and old loaders in the overall cost-benefit analysis.
Question 6.
Analyze the trend in cumulative costs for a machine over four years if the annual costs are 25,00,000; 20,50,000; 15,00,000; 22,50,000 respectively. When should the decision to replace be expected based on minimizing those cumulative costs?
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Plot the costs on a graph to visualize the trend for clearer analysis.

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