Practice Obsolescence Costs (2.3) - Economic Life of a Machine - Construction Engineering & Management - Vol 1

Practice: Obsolescence Costs

Lesson 2.3Economic Life of a Machine

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10 questions

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6 sample questions

Question 1.
Define economic life in relation to machinery.
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Consider the balancing of operating costs.
Question 2.
What are obsolescence costs?
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Think about the influence of technology.
3Question 3.
What is economic life?
- A period of maximum machine lifespan
- Period with lowest operational costs
- Time when machines become obsolete
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It relates to the balance of repairs and operating expenses.
4Question 4.
True or False: Downtime costs increase with the age of the machine.
- True
- False
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Consider how repairs affect work efficiency.
Question 5.
You have a machine worth 35,00,000 with a useful life of 8 years. Calculate its estimated obsolescence costs at year 5, considering a 10% obsolescence per year.
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Think about applying the percentage to the original value directly.
Question 6.
Given the costs of maintenance increase by 10% annually starting at 2,00,000, calculate the total maintenance cost at the end of 4 years.
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Use geometric progression to help in calculating total growth over multiple years.

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