7.2. Profit Life

Try these first

1. 1.

   What are the three main stages of equipment life?

   Hint

   Think about the lifecycle.

2. 2.

   What does 'profit life' refer to?

   Hint

   Focus on profit generation.

3. 3.

   What is the primary function of economic useful life?

   • To determine maximum operating costs
   • To define the time of maximum profit
   • To establish purchase time

   Hint

   Think about profit maximization.

4. 4.

   True or False: An aging piece of equipment can remain in service regardless of cost.

   • True
   • False

   Hint

   Consider costs related to repairs.

5. 5.

   Consider a construction company with a backhoe that has been running for six years. Analyze the potential costs of keeping it versus purchasing a new one.

   Hint

   List the pros and cons of both choices.

6. 6.

   Imagine an equipment fleet suffering from consistent downtime. Develop a maintenance schedule that minimizes costs and maximizes uptime.

   Hint

   Evaluate how often breakdowns occur to create effective schedules.