7.1 - Summary of Key Learnings
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Practice Questions
Test your understanding with targeted questions
What is the initial cost in the example discussed?
💡 Hint: Look for the number mentioned as initial expenses.
Calculate the salvage value if it's set at 20% of the initial cost.
💡 Hint: Multiply the initial cost by 0.2.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the uniform series capital recovery factor used for?
💡 Hint: Think about how recurring costs are derived from initial costs.
True or False: The salvage value is always considered in the total cost of ownership.
💡 Hint: Reflect on the equipment’s value at the end of its lifecycle.
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Challenge Problems
Push your limits with advanced challenges
You have a piece of equipment costing ₹5,00,00,000, depreciating at 10% per year. What would its hourly depreciation cost be for a usage of 2000 hours annually, accounting for a salvage value of ₹50,00,000?
💡 Hint: Use the formula to determine depreciation to subtract salvage from the initial cost.
If fuel is priced at ₹80 per liter and a machine consumes 0.12 liters per horse power per hour for a 350 HP engine, what would the hourly fuel cost be?
💡 Hint: Multiply consumption after determining the machine's power.
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Reference links
Supplementary resources to enhance your learning experience.
- Understanding Equivalent Annual Costs in Capital Recovery
- A Guide to Equipment Cost Estimation
- Depreciation Calculation With Examples
- Time Value of Money Explained
- Understanding Operating Costs of Heavy Equipment
- Sinking Fund Factor Explained
- Fuel Consumption Calculation Methodologies
- Understanding the Components of Ownership Costs
- Cost-Wise Equipment Management Strategies
- How to Estimate Hourly Costs for Construction Equipment