Practice Input Data for Example - 5.1 | 7. Cost of Investment | Construction Engineering & Management - Vol 1
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5.1 - Input Data for Example

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define what the cost of investment includes.

💡 Hint: Consider components like interest rates and potential returns.

Question 2

Easy

What are two methods for calculating investment costs?

💡 Hint: Think about the importance of timing in cash flows.

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

What is the formula for calculating the cost of investment?

  • Cost = Interest Rate x Purchase Price
  • Cost = Interest Rate x Value of Equipment
  • Cost = Purchase Price - Interest Rate

💡 Hint: Think about what components are involved in this formula.

Question 2

True or False: The Average Annual Investment Method provides an exact calculation of ownership costs.

  • True
  • False

💡 Hint: Consider whether the term 'exact' applies.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Assuming a machine has a purchase price of INR 1,000,000, a salvage value of INR 100,000, and a useful life of 10 years, calculate the average annual investment using the Average Annual Investment formula.

💡 Hint: Break down the values into P, S, and n.

Question 2

If you want to calculate total ownership cost for a machine which has a depreciation of INR 250,000, investment cost of INR 100,000, insurance cost of INR 15,000, tax cost of INR 20,000, and storage cost of INR 10,000, what is the total cost?

💡 Hint: Ensure all components are included in your calculations.

Challenge and get performance evaluation