8 - Cost Considerations
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
What is the definition of Economic Useful Life?
💡 Hint: Think about the importance of cost in keeping a machine.
What do we call the existing equipment in our project?
💡 Hint: It is the term for the old machine being used.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is the defender in equipment management?
💡 Hint: Remember the term we used for existing machines.
True or False: Obsolescence costs can impact replacement decisions.
💡 Hint: Consider what happens in the market with older machines.
Get performance evaluation
Challenge Problems
Push your limits with advanced challenges
A company has an excavator with an initial cost of $100,000. It incurs maintenance costs yearly of $10,000, and the projected resale value after 5 years is $30,000. Calculate the total cost of ownership for 5 years.
💡 Hint: Add maintenance costs over the 5 years and subtract resale.
Evaluate the rationale for replacing a concrete mixer that is constantly breaking down, incurring $3,000 in repairs a month. Should it be replaced if a new mixer costs $30,000?
💡 Hint: Compare annual repair costs with the purchasing cost of new equipment.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.