Practice Ownership Cost Calculation According to Peurifoy - 5.2 | 13. Estimating Equipment Cost Using Two Methods | Construction Engineering & Management - Vol 1
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5.2 - Ownership Cost Calculation According to Peurifoy

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What are the components of ownership costs?

💡 Hint: Think about what costs you would incur beyond just buying a piece of equipment.

Question 2

Easy

How is depreciation calculated?

💡 Hint: Remember the equation you learned — Initial Cost minus Salvage Value.

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 does ownership cost include?

  • Only initial purchase
  • Initial purchase and operating costs
  • Only operating costs

💡 Hint: Think about all costs associated with owning and running equipment.

Question 2

Is depreciation considered in operating cost calculations?

  • True
  • False

💡 Hint: Remember the definitions we discussed earlier.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Calculate the total cost for a piece of equipment with a purchase price of 500,000, having operating costs of 60 per hour, expected to be used for 2,000 hours annually over 10 years, with a salvage value at 20%.

💡 Hint: Start by determining annual depreciation before summing it up with operating costs.

Question 2

Apply both Caterpillar and Peurifoy methods on a dump truck with a purchase price of 3 crores. Discuss key differences in estimates produced.

💡 Hint: Understand how each method approaches the timing of cash flows and expenses.

Challenge and get performance evaluation