5.3 - Downtime Costs Calculation
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Practice Questions
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What does economic life refer to?
💡 Hint: Think about the costs associated with keeping equipment.
Name two components of total machine costs.
💡 Hint: Consider costs that arise during operation and over time.
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Interactive Quizzes
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What is the economic life of a machine?
💡 Hint: Think about cost management in machinery.
True or False: Downtime is the time the machine is operational.
💡 Hint: Consider the meaning of downtime.
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Challenge Problems
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You have a machine valued at ₹50,00,000 and it's set to depreciate using the Double Declining Balance Method. Calculate the value at the end of year 3 with a useful life of 10 years. Find out the depreciation for each year.
💡 Hint: Refer to the formula and apply it for each year calculating depreciation.
If a machine has an operational cost of ₹750 per hour with projected downtime at 8% for 5,000 hours in a year, calculate the total downtime cost for that year.
💡 Hint: Think about how you can calculate lost productivity to find the cost.
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