Practice Depreciation Calculation - 3.1.1 | 12. Equipment cost – Caterpillar and Peurifoy method | Construction Engineering & Management - Vol 1
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3.1.1 - Depreciation Calculation

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for calculating depreciation using the straight-line method?

💡 Hint: Think about the basics of how value decreases over time.

Question 2

Easy

What is salvage value?

💡 Hint: Consider what you expect to get after you've used the equipment.

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 method is primarily used for estimating depreciation in this section?

  • Reduced Cost Method
  • Straight-Line Method
  • Declining Balance Method

💡 Hint: Recall the method discussed in class.

Question 2

True or False? The Peurifoy method involves consideration of time value in its calculations.

  • True
  • False

💡 Hint: Think about what the 'time value of money' concept means.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

An excavator has an initial price of $300,000, a salvage value of $20,000, and a recommended useful life of 10 years with a tire cost of $15,000. Calculate the yearly depreciation and discuss the factors impacting this equipment's operating cost.

💡 Hint: Break down the questions and remember to exclude tire costs from ownership cost calculations.

Question 2

If the fuel cost for a machine operating under heavy loads is expected to be $120 per hour, while under normal conditions it’s $80 per hour, explain how the choice of operating conditions affects the project budget.

💡 Hint: Consider the differences in operational scenarios and their direct financial implications.

Challenge and get performance evaluation