Practice Salvage Value and Life of Challenger - 1.2 | 21. Introduction to Defender and Challenger Equipment | Construction Engineering & Management - Vol 1
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1.2 - Salvage Value and Life of Challenger

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the operating cost of the challenger?

💡 Hint: Check the section where costs are mentioned.

Question 2

Easy

What does salvage value mean?

💡 Hint: Think about the end value of the equipment.

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 operating cost of the challenger?

  • ₹90,000
  • ₹1,35,000
  • ₹12,00,000

💡 Hint: Consider the annual costs mentioned earlier.

Question 2

Is the salvage value of the defender higher than that of the challenger?

  • True
  • False

💡 Hint: Review the numbers for both machines.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A construction company is evaluating two machines—Defender and Challenger. If Defender has an initial cost of ₹35,00,000 and an operating cost of ₹1,35,000 with a salvage value of ₹6,00,000, while Challenger has an initial cost of ₹27,50,000 and an operating cost of ₹90,000 with a salvage value of ₹12,00,000, what should the company conclude based on EAC after 5 years?

💡 Hint: Evaluate both cash outflows and inflows to get the annualized costs.

Question 2

Given that the investment cost is at 10%, if a company considers replacing a machine with a higher salvage value and lower operating costs, how might this decision change over time if market conditions affect salvage values?

💡 Hint: Consider how external factors can shift financial decisions over time.

Challenge and get performance evaluation