1.1 - First Year Downtime Cost
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Practice Questions
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Calculate the downtime cost per hour for equipment that costs 900 rupees, with a downtime percentage of 3%.
💡 Hint: Use the formula: (downtime percentage * equipment cost) / 100.
If a machine operates 1,500 hours, what is the total downtime cost at 54 rupees per hour?
💡 Hint: Multiply the hourly cost by the total hours of operation.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the initial downtime cost per hour for a machine that costs 900 rupees?
💡 Hint: Remember to use the percentage formula.
True or False: The obsolescence cost increases as machines grow older.
💡 Hint: Consider how newer models might perform better.
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Challenge Problems
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Calculate the total downtime and obsolescence costs for a machine over three operating years given the following rates: Year 1 - 3%, Year 2 - 6%, Year 3 - 12%.
💡 Hint: Break it down year by year, adding each year's costs.
Given that the cumulative costs are minimum in the fourth year, determine the implications of using a machine beyond its economic life.
💡 Hint: Think about the return compared to the costs of keeping old equipment.
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