Practice Total Cost Calculation Using Caterpillar Method (2.3) - Estimating Equipment Cost Using Two Methods

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6 sample questions

Question 1.
What is depreciation?
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Think about how things wear out.
Question 2.
List one component of ownership costs.
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These costs are related to owning equipment.
3Question 3.
What does the Caterpillar method calculate?
- Operating Costs
- Total Equipment Costs
- Depreciation Only
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Think about the comprehensive nature of this method.
4Question 4.
True or False: Operating Costs are included in Ownership Costs.
- True
- False
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Recall the definitions of both terms.
Question 5.
Calculate the total hourly cost for a dump truck that has an ownership cost of ₹2713.00/hr, operating cost of ₹3209.29/hr, and operator wages of ₹200/hr. Show your calculations.
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Add these three components together.
Question 6.
If the useful life of the dump truck changes to 15 years, recalculate the hourly depreciation cost using the original price without tire cost.
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Update the life value in the depreciation formula.

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