Practice Insurance Cost Calculation (4.1) - Initial Cost Analysis - Construction Engineering & Management - Vol 1

Practice: Insurance Cost Calculation

Lesson 4.1Initial Cost Analysis

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8 questions

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6 sample questions

Question 1.
What is the formula for calculating the annualized initial cost?
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Think of the components: initial cost, interest, and lifespan.
Question 2.
How do you calculate the insurance cost if it's 2% of an initial cost of ₹2,89,00,000?
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It's simply finding 2% of the total cost.
3Question 3.
What is the formula used to calculate the annualized cost of machinery?
- Annualized Cost = (Initial Cost × i) / (1 + i)^n
- Annualized Cost = (Initial Cost × i(1+i)^n) / ((1+i)^n - 1)
- Annualized Cost = Initial Cost / lifespan
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Focus on how interest and lifespan influence costs.
4Question 4.
True or False: The salvage value is accounted for in the total ownership cost calculation.
- True
- False
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Consider how salvage value impacts expenses.
Question 5.
You have a machine with an initial cost of ₹2,89,00,000, interest rate of 8%, and a salvage value of 20%. Calculate both the annualized initial cost and the annualized salvage value.
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Use the relevant formulas for annualized costs.
Question 6.
If you know that the total ownership cost equals ₹5759.2 per hour and it includes operator wages of ₹200, what are the total operating costs excluding the operator?
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Subtract operator costs from the total to find operational expenses.

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