Practice Equivalent Uniform Annual Cost of Initial Cost - 1.1 | 14. Initial Cost Analysis | Construction Engineering & Management - Vol 1
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Knowledge

1.1 - Equivalent Uniform Annual Cost of Initial Cost

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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 calculating Equivalent Uniform Annual Cost (EUAC)?

💡 Hint: Remember EUAC includes initial cost and time value of money.

Question 2

Easy

Define 'Salvage Value'.

💡 Hint: Think about what happens to the equipment at the end.

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 does EUAC stand for?

  • Equivalent Uniform Annual Cost
  • Estimated Uniform Annual Calculation
  • Equal Utility Annual Cost

💡 Hint: Think about financial metrics in project management.

Question 2

Is the salvage value an important factor in calculating total asset costs?

  • True
  • False

💡 Hint: Consider the future resale value.

Solve 3 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A construction firm purchases a new concrete mixer for ₹ 15,00,000. If the equipment depreciates regularly at a rate ensuring a salvage value of ₹ 3,00,000 over a useful life of 8 years, calculate its EUAC using an interest rate of 7%. Provide full computations.

💡 Hint: Remember to factor in both depreciation and the salvage value.

Question 2

An equipment rental business estimates an initial cost of ₹ 25,00,000 for a truck that will cost about ₹ 55,000 annually to operate. Given an anticipated salvage value of ₹ 2,50,000 after 10 years, compute both the ownership and operating costs in a 10-year framework; discuss the analysis findings.

💡 Hint: Look closer at how recurring costs align against initial investment for overall analysis.

Challenge and get performance evaluation