Problem 1. What are several examples of operating assets? Why are operating assets essential to a company's long-term future?
Problem 2. What factors may contribute to the decline in usefulness of operating assets? Should the choice of depreciation method be related to these factors? Must a company choose just one method of depreciation for all assets?
Problem 3. Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the interest in advance. Is 10% the "real" rate of interest that you will pay? How could the true interest rate be calculated?