7. Conclusion and References

Try these first

1. 1.

   What does the Caterpillar method focus on?

   Hint

   Think about how businesses track equipment costs over time.

2. 2.

   Describe what FOG stands for.

   Hint

   Remember the components affecting operational expenses.

3. 3.

   What does the acronym FOG stand for?

   • Fuel
   • Oil
   • and Grease
   • Filter
   • Oil
   • and Grease
   • Fix
   • Operate
   • and Generat

   Hint

   It relates to operational costs.

4. 4.

   True or False: The Caterpillar method relies solely on current market rates.

   • True
   • False

   Hint

   Think about how this method bases its calculations.

5. 5.

   You are estimating costs for an unconventional mining project. Discuss the pros and cons of using the Caterpillar method vs. the Time Value method.

   Hint

   Weigh the historical data reliability against project uniqueness.

6. 6.

   Analyze how incorrect FOG factor estimates impact project overall costs. Propose mitigations.

   Hint

   Consider how ongoing adjustments can help maintain budget accuracy.