5.1. Fuel Cost Estimation

Try these first

1. 1.

   Calculate the annualized cost for an initial cost of ₹5,00,00,000 at an interest rate of 7% over 8 years.

   Hint

   Remember to identify your initial cost, interest rate, and duration.

2. 2.

   What is the salvage value for a machine costing ₹1,00,00,000 assuming it depreciates to 10%?

   Hint

   Find 10% of the initial cost.

3. 3.

   What is the formula to calculate annualized cost from an initial cost?

   Hint

   Break it down into parts and remember the inputs needed.

4. 4.

   True or False: The salvage value increases our annual operational costs.

   Hint

   Think about how salvage value is used in calculations.

5. 5.

   A bulldozer costs ₹60,00,000 with a lifespan of 15 years at an interest rate of 7%. What’s the annualized cost?

   Hint

   Use the formula step-by-step to isolate annualized result.

6. 6.

   Given total annual operational costs of ₹2500/hour, calculate the effect of a 10% decrease in maintenance costs.

   Hint

   Consider the new total cost after adjusting for the percentage decrease.