Practice Equipment Ownership Cost Estimation Approaches (3.3) - Construction Methods and Equipment Management

Practice: Equipment Ownership Cost Estimation Approaches

Lesson 3.3Construction Methods and Equipment Management

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9 questions

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4 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What are owning costs?
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Think about the long-term costs that do not change with usage.
Question 2.
What is operating cost?
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Consider costs that fluctuate based on equipment usage.
3Question 3.
What does Owning Cost typically include?
- Operating Costs
- Fuel Costs
- Depreciation and Interest
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Think about costs that accrue regardless of usage.
4Question 4.
True or False: The Average Annual Investment Method accounts for the time value of cash flows.
- True
- False
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Focus on what the method implies about cost estimation.
Question 5.
A construction project requires a bulldozer. Its initial purchase cost is $100,000, with an expected life of 10 years and an estimated yearly operational cost of $15,000. Calculate the Average Annual Investment.
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Add both parts together before dividing by the lifespan.
Question 6.
If a company anticipates cash inflows from machinery depreciation over time and expects a future cash flow of $30,000 in 5 years, calculate its present value using a discount rate of 5%.
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Be sure to factor in the interest rate when discounting.

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