Practice Total Cost Of Equipment (6) - Initial Cost Analysis - Construction Engineering & Management - Vol 1

Practice: Total Cost of Equipment

Lesson 6Initial Cost Analysis

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8 questions

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Exercise
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6 sample questions

Question 1.
What is the formula for calculating annualized cost from the initial cost?
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Consider the components: Initial cost, interest rate, and number of years.
Question 2.
How do you calculate the salvage value of equipment?
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Remember, it's a fraction of the initial cost.
3Question 3.
What is the annualized cost formula?
- A) Initial Cost × [i(1+i)^n / ((1+i)^n - 1)]
- B) Initial Cost + Salvage Value
- C) Initial Cost / Years
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Focus on how future payments relate to present costs.
4Question 4.
True or False: Salvage value is always a fixed percentage of the initial cost.
- True
- False
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Think about how salvage relates to initial investment.
Question 5.
An organization is estimating the annual cost of a heavy-duty truck with an initial cost of ₹1,20,00,000, a salvage value of 15% after 15 years with an interest of 10%. Calculate the total annual cost of ownership including depreciation.
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Use the formulas for annualized costs and salvage values.
Question 6.
A construction firm has a crane costing ₹90,00,000. After 10 years, it has a salvage value calculated at 10% of its initial cost. If the firm operates the crane for 1,200 hours annually, what is the hourly cost of operation, including depreciation and salvage value?
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Deduct the salvage value and divide by operating hours.

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