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13. Estimating Equipment Cost Using Two Methods
The chapter delves into the estimation of equipment costs, primarily focusing on ownership and operating costs. It outlines two prominent methods, the Caterpillar method and the Peurifoy method, for accurately assessing these costs. Key components such as depreciation, annual usage, interest rates, and labor costs are elaborated upon to provide a comprehensive understanding of equipment management in construction.
Sections
This section discusses two methods for estimating equipment costs, focusing on ownership and operating costs through practical examples.
This section explores the calculation of ownership costs for equipment, specifically focusing on the Caterpillar and Peurifoy methods.
This section discusses methods for estimating the operating costs of equipment, particularly focusing on ownership and operational expenses using various calculation methods.
This section discusses the estimation of total cost for equipment ownership and operation, focusing on methods like the Caterpillar method and the Peurifoy method.
This section explains the Peurifoy approach to estimating equipment costs by detailing ownership and operating costs using example calculations.
Estimating equipment costs involves both ownership and operating costs.
The Caterpillar method provides a straightforward approach for cost estimation.
The Peurifoy method emphasizes the time value of money for more accurate estimations.
Ownership Cost
The total cost associated with owning equipment, including depreciation, interest, insurance, and taxes.
Operating Cost
The ongoing costs for operating equipment, such as fuel, labor wages, and maintenance.
Depreciation
The reduction in value of an asset over time, used in calculating ownership cost.
Caterpillar Method
A method of estimating equipment costs based on ownership and operating costs calculated separately.
Peurifoy Method
A method that incorporates the time value of money in the estimation of equipment costs.
Practice Exercises
Total Questions
2
Estimated Time
4 min
Passing Score
70%
Instructions
- Read each question carefully
- You can use hints if you need help
- Complete all questions before submitting
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