Practice Tire Cost - 2.2.3 | 12. Equipment cost – Caterpillar and Peurifoy method | Construction Engineering & Management - Vol 1
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Knowledge

2.2.3 - Tire Cost

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What are the two main components of equipment costs discussed in this section?

💡 Hint: Think of what costs are incurred directly from owning equipment.

Question 2

Easy

How is depreciation for tires calculated?

💡 Hint: Consider the formula provided in the lesson.

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 the primary method to estimate ownership cost?

  • Average Annual Method
  • Time Value Method
  • Straight-Line Method

💡 Hint: Focus on the terminology used in the lesson.

Question 2

Is the Peurifoy Method concerned with cash flow timing?

  • True
  • False

💡 Hint: Reflect on the key elements of the method you learned.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A construction company is budgeting for an excavator with an initial tire cost of $10,000 and a salvage value of $2,000 over a life span of 6,000 hours. Calculate the tire depreciation cost per hour. Additionally, if market prices increase the replacement cost to $12,000, how would it impact the operational cost?

💡 Hint: Follow the depreciation formula and assess how changes in costs will impact your hourly projections.

Question 2

Analyze a scenario where you have to compare two different tire models for an excavator; one costs $9,000 with a lifespan of 4,000 hours and the other costs $12,000 with a lifespan of 5,000 hours. Which one would be more cost-effective and why?

💡 Hint: Evaluate the cost per hour to determine which tire model is financially smarter over its productive life.

Challenge and get performance evaluation