4.3. Obsolescence and Efficiency

Try these first

1. 1.

   What is equipment life?

   Hint

   Think about the process from buying to the end of usage.

2. 2.

   Define obsolescence.

   Hint

   Consider new models in the market.

3. 3.

   What is the primary purpose of analyzing economic life?

   • To increase downtime
   • To maximize profitability
   • To reduce purchase costs

   Hint

   Think about how money is impacted by maintaining old machines.

4. 4.

   True or False: Obsolescence only occurs when equipment is physically broken.

   • True
   • False

   Hint

   Consider what happens as new models are released.

5. 5.

   A contractor has two excavators: one is 15 years old with high maintenance costs, and one is newly purchased. What factors should the contractor consider before deciding on replacement?

   Hint

   List down both economic and obsolescence factors.

6. 6.

   Analyze how the replacement of machinery can lead to increased project profitability using real data from a construction project.

   Hint

   Consider past performance metrics and compare them with expected outcomes from new machinery.