Practice Estimation of Ownership Costs - 5.3 | 7. Cost of Investment | Construction Engineering & Management - Vol 1
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Knowledge

5.3 - Estimation of Ownership Costs

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does the cost of investment represent?

💡 Hint: Think about what capital costs involve and how they are calculated.

Question 2

Easy

What percentage range is typical for insurance costs?

💡 Hint: Recall the common range mentioned in the text.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

The cost of investment includes which of the following?

  • A) Annual interest paid
  • B) Rate of return
  • C) Both A and B

💡 Hint: Think about what constitutes costs associated with funds used for investment.

Question 2

True or False: Ownership costs only include the purchase price of equipment.

  • True
  • False

💡 Hint: Consider all aspects of costs involved beyond just the initial purchase.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

You have a piece of machinery with a purchase price of ₹ 100,000, a salvage value of ₹ 20,000, a useful life of 10 years, and an insurance cost of 2%. Calculate the total ownership cost over its useful life.

💡 Hint: Break down each step and calculate each cost over the machinery’s useful life.

Question 2

A machine costs ₹ 250,000, has a salvage value of ₹ 30,000, and an expected life of 5 years. If you'd finance through a loan at 6%, calculate the cost of investment and total ownership cost, including insurance (1%) and taxes (2%).

💡 Hint: Identify and sum all cost components to find the total ownership cost for the machine.

Challenge and get performance evaluation