Practice Ownership Cost Calculation (2) - Estimating Equipment Cost Using Two Methods

Practice: Ownership Cost Calculation

Lesson 2Estimating Equipment Cost Using Two Methods

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10 questions

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6 sample questions

Question 1.
Define ownership cost.
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Think about what costs arise from having equipment in use.
Question 2.
What is depreciation?
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Consider how value changes as the equipment ages.
3Question 3.
What does ownership cost include?
- Only purchase price
- Purchase price
- depreciation
- insurance
- operating costs
- Only maintenance costs
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Think about all the responsibilities of ownership.
4Question 4.
True or False: Depreciation increases the value of an asset over time.
- True
- False
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Consider how assets typically age.
Question 5.
A construction company has a dump truck purchased for ₹4,00,00,000, with a useful life of 15 years and a salvage value of 20%. What will be the annual depreciation using the straight-line method?
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Calculate the salvage value first!
Question 6.
Estimate the total ownership cost of an excavator purchased for ₹5,00,00,000, expected to operate 2000 hours yearly and subject to depreciation, insurance 2%, interest 6%, and operational costs attached. Calculate each component.
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Break down each component calculation before summing.

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