2.1. Recap of Lecture 8: Equipment Replacement Analysis

Try these first

1. 1.

   What is equipment replacement analysis?

   Hint

   Think about why companies evaluate their machinery.

2. 2.

   What is the economic life span of a piece of equipment?

   Hint

   Focus on how long the equipment remains useful.

3. 3.

   What is the primary focus of equipment replacement analysis?

   • To enhance project timelines
   • To improve productivity at lower cost
   • To increase machinery complexity

   Hint

   Think about why this analysis is done in construction projects.

4. 4.

   True or False: The payback period is the time it takes for equipment to produce enough income to justify its purchase.

   • True
   • False

   Hint

   It relates directly to financial investments.

5. 5.

   You are managing a project's equipment. If a bulldozer's operational cost reaches $15,000 annually and a new machine would cost$45,000 with a payback period of 3 years, what should you advise?

   Hint

   Consider long-term costs versus short-term expenses.

6. 6.

   You face a project delay caused by equipment malfunction. How would you evaluate the decision to repair existing equipment versus replacing it?

   Hint

   Focus on how time impacts project efficiency.