6.1 - Total Operating Cost Calculation
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
What is the formula for calculating annualized cost from the initial cost?
💡 Hint: Refer to the uniform series capital recovery factor.
What does salvage value represent?
💡 Hint: Think about how machinery is valued once it's no longer in service.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula to calculate annualized cost from the initial cost?
💡 Hint: It involves both interest rates and time.
True or False: The salvage value is always 100% of the initial cost after its useful life.
💡 Hint: Think about what happens to assets over time.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
Using an initial machinery cost of ₹ 4,00,00,000, with an interest rate of 7% over 10 years and a salvage value of 15%, calculate the annualized cost and the hourly depreciation if the machine operates for 2000 hours a year.
💡 Hint: Ensure to calculate each component stepwise for accuracy.
If fuel costs increase by 20% and the operating efficiency improves by 10%, how does this affect the total operating cost? Calculate the new total considering original costs ₹ 1150 for fuel, ₹ 361 for insurance, and various other costs.
💡 Hint: Focus on re-evaluating just the fuel component to begin.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.