Practice Total Cost Calculation (2) - Equivalent Annual Cost Calculation

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8 questions

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Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What does EAC stand for?
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It expresses costs on an annual basis.
Question 2.
Calculate the EAC for a purchase price of 3,000,000 using a factor of 0.5.
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Multiply the price by the provided factor.
3Question 3.
What does EAC stand for?
- Effective Annual Cost
- Equalized Asset Cost
- Equivalent Annual Cost
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Consider the definition of EAC discussed.
4Question 4.
True or False: The salvage value can decrease total costs.
- True
- False
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Think about how cash inflows affect overall financials.
Question 5.
If a machine's EAC for purchase is 50,000, for operating is 15,000, and salvage at 10,000, calculate its total yearly cost.
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Add EAC for purchase and operations and subtract salvage.
Question 6.
Scenario: You have an operating cost that changes yearly by 5%. If the initial cost is 10,000, what will it be in Year 3?
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Remember to apply the percentage increase for each subsequent year.

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