Practice Maintenance And Repair Costs (5) - Economic Life of a Machine

Practice: Maintenance and Repair Costs

Lesson 5Economic Life of a Machine

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10 questions

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6 sample questions

Question 1.
What is economic life?
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Think about the time frame of machine usage.
Question 2.
Name one factor that increases costs after the economic life.
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What happens to the machine as it gets older?
3Question 3.
What is the economic life of machinery?
- The maximum time a machine can run
- The time period with the lowest holding costs
- The time when depreciation stops
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It's about cost management.
4Question 4.
True or False: Downtime costs increase with machine age.
- True
- False
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Consider the reliability of older machines.
Question 5.
A machine starts with a cost of 50,00,000 and has a cumulative maintenance cost of 5,50,000 after 5 years. If its value depreciates to 25,00,000, what is the total cost over the 5 years?
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Combine all costs and subtract any revenue generated.
Question 6.
You have data showing that a machine incurs 1,00,000 in downtime costs due to breakdowns in year six. If maintenance costs increase by 10% annually, what would the total cost be in year six including downtime?
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Calculate the new maintenance cost first, then add downtime costs.

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