Practice Components Of Ownership Cost (2) - Cost of Investment - Construction Engineering & Management - Vol 1

Practice: Components of Ownership Cost

Lesson 2Cost of Investment

Practise this section

8 questions

Flashcard drill
2 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
2 questions · about 1 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
Define investment cost.
Show hintHide hint
Think about what costs are involved in purchasing machinery.
Question 2.
What is the typical range for insurance costs?
Show hintHide hint
Remember, insurance is a percentage of the asset's value.
3Question 3.
What is the primary factor in determining investment cost?
- Value of the Equipment
- Interest Rate
- Depreciation
Show hintHide hint
Consider how loans influence costs.
4Question 4.
True or False: Storage costs are only applicable when the equipment is in use.
- True
- False
Show hintHide hint
Reflect on how storage operates in machinery management.
Question 5.
A machine valued at $50,000 incurs an investment cost of 8%. Additionally, the insurance cost is set at 1.5%, and property taxes at 3%. If storage is 0.8%, calculate the total ownership cost.
Show hintHide hint
Consider calculating each component individually and then summing them up.
Question 6.
Discuss how neglecting the storage costs can affect the estimated ownership cost over a year, especially for a construction firm.
Show hintHide hint
Think about how many days equipment needs to be stored and secured.

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