Practice Total Hourly Ownership Cost (4.3) - Initial Cost Analysis - Construction Engineering & Management - Vol 1

Practice: Total Hourly Ownership Cost

Lesson 4.3Initial Cost Analysis

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8 questions

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6 sample questions

Question 1.
What is the formula for calculating annualized initial cost?
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Look for the definitions of 'i' and 'n'.
Question 2.
How do you derive salvage value from initial cost?
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Remember the salvage value is often expressed as a percentage.
3Question 3.
What is the formula for calculating the annualized initial cost?
- A) Annualized Initial Cost = Initial Cost × [i(1+i)ⁿ / [(1+i)ⁿ - 1]]
- B) Annualized Initial Cost = Initial Cost / (1 + i)ⁿ
- C) Annualized Initial Cost = i + n
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Recall the components of the formula we discussed.
4Question 4.
True or False: The salvage value is included in the calculation of total hourly ownership cost.
- True
- False
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Think about how depreciation relates to ownership costs.
Question 5.
If a piece of equipment costs ₹1,00,00,000 and has a life of 20 years expected at 10% salvage, calculate its annual depreciation.
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Subtract the salvage from the initial cost before dividing by the lifespan.
Question 6.
Given an equipment that incurs ₹750/hr for operating costs, how does this affect a total ownership cost derived from other factors? If ownership resulted in ₹1900/hr, find the complete total.
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Add the operating and total ownership together for a complete picture.

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