Practice Uniform Series Capital Recovery Factor (2.2) - Equipment Life and Replacement Analysis (Part 3)

Practice: Uniform Series Capital Recovery Factor

Lesson 2.2Equipment Life and Replacement Analysis (Part 3)

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8 questions

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2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What does USCRF stand for?
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Think about the role it plays in cost calculations.
Question 2.
What is a sunk cost?
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Consider what you would overlook in future decisions.
3Question 3.
What is the primary purpose of the Uniform Series Capital Recovery Factor?
- To calculate depreciation
- To find equivalent annual costs
- To assess total equipment lifespan
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Focus on how financial metrics connect to recurring expenses.
4Question 4.
True or False: Sunk costs should be a primary consideration in future business decisions.
- True
- False
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Think about costs you cannot get back.
Question 5.
A piece of construction equipment was bought for $80,000, expected to last 12 years. Operating costs are $5,000 yearly. After year five, it can be sold for $25,000. Calculate its EAC for its first 12 years.
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Don’t forget to adjust for the market change at year five.
Question 6.
An investment in machinery leads to $10,000 in annual savings when upgraded. If the upgrade costs $15,000 and expected lifespan is 10 years, determine if the machine should be upgraded if the discount rate is 8%.
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Look back at the formulas you've learned to calculate the present value.

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