5.2 - FOG Cost Estimation
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating the equivalent uniform annual cost?
💡 Hint: Think about how interest and time factor in.
Define salvage value.
💡 Hint: Consider what happens to equipment when it's no longer useful.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the annualized cost formula?
💡 Hint: Which option incorporates interest?
The salvage value represents the future resale value of a piece of equipment.
💡 Hint: Think about when you'd sell equipment.
2 more questions available
Challenge Problems
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A construction project has machinery with an initial cost of ₹4,50,00,000. The salvage value is estimated at 10% of the initial cost. Calculate the annualized initial cost over a 10-year lifespan at a 6% interest rate.
💡 Hint: Work through the formula step by step: calculate exponentials, then multiply.
If the total ownership cost totals ₹2,500,00 and the operational costs add up to ₹1,500,00 for a month of work, what is the total cost for that project?
💡 Hint: Add together all monthly expenditures for total project assessment.
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