1 - Construction Methods and Equipment Management
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Practice Questions
Test your understanding with targeted questions
Define ownership costs in construction.
💡 Hint: Think of expenses that occur even when the equipment is idle.
What is the salvage value?
💡 Hint: Consider the value you can recoup when selling old equipment.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What are ownership costs?
💡 Hint: Think about costs that persist even if the machine stands idle.
True or False: Depreciation is a cash flow expense.
💡 Hint: Consider how it affects financial statements but not actual cash on hand.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A construction contractor estimates the initial cost of a crane to be $150,000 with a salvage value of $30,000 and a useful life of 10 years. Calculate the total depreciation over its useful life and annual depreciation using the straight line method.
💡 Hint: Use the straight line formula: (Initial Cost - Salvage Value) / Useful Life.
A piece of equipment sees heavy use in its first three years. If its initial cost is $200,000, salvage value is $20,000, and its useful life is 5 years, calculate the first-year depreciation using the sum of the years digit method.
💡 Hint: Recall the formula for the sum of the years digit method and note that the total years left determines the factor.
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