Practice Costs Associated With The Machine (3) - Economic Life of a Machine

Practice: Costs Associated with the Machine

Lesson 3Economic Life of a Machine

Practise this section

9 questions

Flashcard drill
3 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What does 'economic life' refer to?
Show hintHide hint
Think about the time when a machine is most beneficial to keep.
Question 2.
What is downtime cost?
Show hintHide hint
Reflect on the times the machine cannot work due to repairs.
3Question 3.
What is economic life?
- Period of maximum cost
- Period of minimum cost
- Fixed duration of machine usage
Show hintHide hint
Focus on the benefits of owning machinery over time.
4Question 4.
True or False: Obsolescence costs refer to the depreciation of older machines only.
- True
- False
Show hintHide hint
Think of how new models affect older machines.
Question 5.
A company has a machine that costs 2,00,000 per year to maintain after the first year. If inflation is projected to be 5% annually, calculate the maintenance budget for the next five years.
Show hintHide hint
Adjust each year's cost by multiplying the prior year's cost by 1 plus the inflation rate.
Question 6.
Calculate how obsolescence affects a machine's resale value if its current market worth is 25,00,000, but newer models cause a depreciation of 30%. What’s the expected value?
Show hintHide hint
Think of how quickly technology advances and what that does to older models.

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