Practice Example of Estimating Economic Life - 1.2 | 16. Economic Life of a Machine | Construction Engineering & Management - Vol 1
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Knowledge

1.2 - Example of Estimating Economic Life

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define economic life in the context of machinery.

💡 Hint: Think about the time frame for machine efficiency.

Question 2

Easy

What is depreciation?

💡 Hint: Consider how machinery loses value.

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 economic life?

  • The total time a machine can operate
  • The period where costs are minimized
  • The time until mechanical failure

💡 Hint: Think about when owning a machine is most efficient.

Question 2

True or False: Depreciation does not affect replacement costs.

  • True
  • False

💡 Hint: Consider how machinery's value changes over time.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Given a machine with a purchase price of ₹50,00,000, a salvage value of ₹5,00,000, inflation of 4% annually, and a depreciation rate of 20%, calculate when the optimal replacement year would be for minimal costs over a 5-year period.

💡 Hint: Break down the calculations year by year for clarity.

Question 2

Create a comprehensive report analyzing three different machines with differing economic lives, costs, and salvage values to determine which should be replaced first, using cumulative cost analysis.

💡 Hint: Include all associated costs and evaluate them relative to their age.

Challenge and get performance evaluation