6 - Summary of Ownership Cost Estimation
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
Define investment cost in your own words.
💡 Hint: Think about the basis of costs incurred for equipment ownership.
List two components of ownership cost.
💡 Hint: Consider the expenses that recur over time with machinery.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does investment cost represent?
💡 Hint: Reflect on what future costs are derived from investments.
True or False: The average annual investment method is typically more accurate than the time value method.
💡 Hint: Consider the factors involved in each method's calculation.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
A heavy construction machine costs $500,000 and has an expected lifespan of 10 years. If it has a salvage value of $50,000, calculate its annual depreciation using the straight-line method.
💡 Hint: Consider the total depreciation spread over the lifespan.
Company X purchases a crane for $200,000, incurs 2% for insurance, 1.5% for taxes, 3% for storage, and expects depreciation of $25,000 annually. Calculate the total ownership cost after one year.
💡 Hint: Ensure to calculate percentages accurately based on equipment value.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.
- Cost of Owning Equipment: Understanding Ownership Costs
- Depreciation Methods: Straight-Line vs. Declining Balance
- Understanding Time Value of Money
- Equipment Ownership Cost Estimation
- Understanding Average Annual Investment
- Key Elements of Construction Equipment Costs
- Managing Equipment Costs for Construction Projects