4.1. Total Equipment Cost Calculation

Try these first

1. 1.

   What are the main components of ownership costs?

   Hint

   Think about what costs come with owning equipment.

2. 2.

   How do we calculate depreciation if salvage value is 0?

   Hint

   Focus on the straight-line method.

3. 3.

   Which of the following is NOT a component of ownership costs?

   • Interest
   • Tires
   • Taxes
   • Insurance

   Hint

   Think about the general categories of costs.

4. 4.

   True or False: Operating costs include only fuel expenses.

   • True
   • False

   Hint

   Consider all ongoing expenses related to equipment operation.

5. 5.

   If a dump truck is expected to have a salvage value of 20% of the initial cost and an initial cost of ₹3 crore, calculate the new depreciation.

   Hint

   Calculate salvage before depreciation.

6. 6.

   A truck uses 0.09 liters per horsepower per hour and has 250 horsepower. If gas costs ₹65 per liter, compute the fuel cost for 1,600 hours annually.

   Hint

   Consider the annual usage to find total costs.