3.3. Tire Cost Calculation

Try these first

1. 1.

   What is ownership cost?

   Hint

   It is what you pay to own the equipment.

2. 2.

   How do you determine salvage value?

   Hint

   Think about the value of the equipment after its useful life.

3. 3.

   What are the three main components of equipment costs?

   • Ownership costs
   • Operating costs
   • Operator wages
   • All of the above

   Hint

   Think about what it takes to own and operate equipment.

4. 4.

   True or False: The salvage value is always 10% of the initial cost.

   • True
   • False

   Hint

   Consider how salvage value is typically set based on initial cost.

5. 5.

   A dump truck's operating context changes frequently. If fuel prices rise to ₹80/liter but the efficiency drops to 0.08 liters per horsepower, how will this impact the hourly fuel cost?

   Hint

   Focus on recalculating using the updated price and consumption rate.

6. 6.

   If the estimated useful life of the equipment decreases to 10 years, how would this affect the annual depreciation calculation?

   Hint

   A shorter lifespan increases annual costs proportionately.