Practice Methods to Calculate Ownership Costs - 3 | 7. Cost of Investment | Construction Engineering & Management - Vol 1
K12 Students

Academics

AI-Powered learning for Grades 8–12, aligned with major Indian and international curricula.

Professionals

Professional Courses

Industry-relevant training in Business, Technology, and Design to help professionals and graduates upskill for real-world careers.

Games

Interactive Games

Fun, engaging games to boost memory, math fluency, typing speed, and English skills—perfect for learners of all ages.

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does investment cost include?

💡 Hint: Think about borrowed funds and potential returns.

Question 2

Easy

What are the two primary methods of calculating ownership costs?

💡 Hint: Recall the methods discussed.

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 purpose of the time value method?

  • To account for the price of the machinery only
  • To consider the timing of cash flows in calculations
  • To estimate the depreciation of assets

💡 Hint: Remember, timing is key in financial decisions.

Question 2

The average annual investment method expresses ownership costs as a percentage of what?

  • True
  • False

💡 Hint: Think about the lifespan of the equipment.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A construction firm buys a machine for $300,000 with annual depreciation of $30,000 and has to pay $3,000 in insurance and $5,000 in taxes annually. Calculate the total ownership cost per year.

💡 Hint: Add each of the relevant costs together.

Question 2

Using the AAI method, determine the average annual investment for a machine initially purchased for $400,000, expecting a salvage value of $80,000 over 8 years.

💡 Hint: Apply the formula for calculating AAI carefully.

Challenge and get performance evaluation