Practice Comparison of Methods - 6.2 | 14. Initial Cost Analysis | Construction Engineering & Management - Vol 1
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6.2 - Comparison of Methods

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for converting initial costs into an annualized cost?

💡 Hint: Look for the capital recovery factor formula.

Question 2

Easy

What does salvage value represent?

💡 Hint: Think about what is left of an asset after depreciation.

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 is the purpose of the uniform series capital recovery factor?

  • To calculate total equipment costs
  • To convert a one-time cost to annual cost
  • To calculate profits from machinery

💡 Hint: Focus on the term 'convert' in the context of costs.

Question 2

True or False: Salvage value is always zero at the end of a machine's useful life.

  • True
  • False

💡 Hint: Think about whether anything of value can remain after use.

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Challenge Problems

Push your limits with challenges.

Question 1

A construction firm has a heavy machine service life of 15 years with an initial cost of ₹25,00,000 and an expected salvage value of 10%. Calculate the annualized cost and the hourly depreciation if used for 2000 hours a year.

💡 Hint: First find the annualized cost using the recovery factor, then use these values to calculate hourly depreciation.

Question 2

Assuming an interest rate of 7% and an initial cost of ₹1,00,00,000 for new machinery, find the total cost to own including an insurance rate of 1.5% over 10 years. Include all calculation steps.

💡 Hint: Apply the capital recovery factor and account for insurance in your calculations.

Challenge and get performance evaluation