3.1. Trends in Cost over Years

Try these first

1. 1.

   What is the downtime cost for a machine costing 900 rupees/hour with a downtime percentage of 3%?

   Hint

   Calculate 3% of 900.

2. 2.

   How much would the annual downtime cost be if the machine operates for 2000 hours?

   Hint

   Multiply the hourly downtime cost by the total hours operated.

3. 3.

   What is the formula for calculating downtime cost per hour?

   • Equipment cost * Downtime percentage
   • Equipment cost / Downtime percentage
   • Equipment cost + Downtime percentage

   Hint

   Think about the relationship between costs and percentages.

4. 4.

   True or False: Obsolescence costs decrease as machinery ages.

   • True
   • False

   Hint

   Consider how aging equipment affects costs.

5. 5.

   If a machine incurs a 10% downtime cost, what total downtime expenses will it accrue over five years if it runs for 2000 hours each year?

   Hint

   Break it down year by year for clarity.

6. 6.

   A machine experiences annual obsolescence costs of 0.12% and operates for 2000 hours. What is the cumulative obsolescence cost after four years?

   Hint

   Remember to calculate each year's cost step-by-step.