Practice Initial Cost (4.1) - Construction Methods and Equipment Management

Practice: Initial Cost

Lesson 4.1Construction Methods and Equipment Management

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9 questions

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6 sample questions

Question 1.
Define ownership costs.
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Think about what it costs to own equipment without using it.
Question 2.
What is salvage value?
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Consider the price obtained after selling used equipment.
3Question 3.
What are the two main components of ownership costs?
- Ownership and Operating Costs
- Initial and Salvage Costs
- Fixed and Variable Costs
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Think about the costs incurred whether the machine is used or not.
4Question 4.
True or False: Depreciation reflects a physical cash flow.
- True
- False
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Consider what depreciation represents in financial statements.
Question 5.
A piece of construction equipment costs $150,000 with a salvage value of $15,000 and is expected to last 10 years. Calculate the annual depreciation using the straight-line method.
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Remember to subtract the salvage value from the initial cost before dividing by the useful life.
Question 6.
Assuming the same equipment as above, calculate the total depreciation over its useful life using the sum-of-the-years'-digits method.
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Break down the digits to distribute the depreciation over the years.

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