Practice Investment Costs (4) - Economic Life of a Machine - Construction Engineering & Management

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8 questions

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6 sample questions

Question 1.
What is economic life?
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Think about the duration of cost-effectiveness!
Question 2.
List one component of investment costs.
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Consider what is included in total costs related to machines.
3Question 3.
What does economic life refer to?
- The total lifespan of a machine
- Period with minimal operating costs
- The price of the machine
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It's about when costs are lowest while operating the machine.
4Question 4.
True or False: Obsolescence costs increase as technology advances.
- True
- False
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Consider how technology affects value over time.
Question 5.
A company purchases a machine for 40,00,000 and incurs yearly maintenance costs of 3,00,000 that increases by 5% annually. Calculate the total maintenance cost after three years.
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Remember to apply the 5% increase for each subsequent year.
Question 6.
Discuss how changes in technology might influence the decision to replace a machine with respect to obsolescence.
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Tie this back to how consumer demand impacts machinery value.

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