Practice Insurance Cost Calculation - 4.1 | 14. Initial Cost Analysis | Construction Engineering & Management - Vol 1
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4.1 - Insurance Cost Calculation

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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 the annualized initial cost?

💡 Hint: Think of the components: initial cost, interest, and lifespan.

Question 2

Easy

How do you calculate the insurance cost if it's 2% of an initial cost of ₹2,89,00,000?

💡 Hint: It's simply finding 2% of the total cost.

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 formula used to calculate the annualized cost of machinery?

  • Annualized Cost = (Initial Cost × i) / (1 + i)^n
  • Annualized Cost = (Initial Cost × i(1+i)^n) / ((1+i)^n - 1)
  • Annualized Cost = Initial Cost / lifespan

💡 Hint: Focus on how interest and lifespan influence costs.

Question 2

True or False: The salvage value is accounted for in the total ownership cost calculation.

  • True
  • False

💡 Hint: Consider how salvage value impacts expenses.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

You have a machine with an initial cost of ₹2,89,00,000, interest rate of 8%, and a salvage value of 20%. Calculate both the annualized initial cost and the annualized salvage value.

💡 Hint: Use the relevant formulas for annualized costs.

Question 2

If you know that the total ownership cost equals ₹5759.2 per hour and it includes operator wages of ₹200, what are the total operating costs excluding the operator?

💡 Hint: Subtract operator costs from the total to find operational expenses.

Challenge and get performance evaluation