Practice Total Operating Cost Calculation - 6.1 | 14. Initial Cost Analysis | Construction Engineering & Management - Vol 1
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6.1 - Total Operating 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 annualized cost from the initial cost?

💡 Hint: Refer to the uniform series capital recovery factor.

Question 2

Easy

What does salvage value represent?

💡 Hint: Think about how machinery is valued once it's no longer in service.

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 to calculate annualized cost from the initial cost?

  • IC × [i(1+i)^n] / [(1+i)^n - 1]
  • IC / (1 + i) ^ n
  • IC × i / n

💡 Hint: It involves both interest rates and time.

Question 2

True or False: The salvage value is always 100% of the initial cost after its useful life.

  • True
  • False

💡 Hint: Think about what happens to assets over time.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

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.

Question 2

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.

Challenge and get performance evaluation