2.1. Equipment Must Pay for Itself

Try these first

1. 1.

   What is the Total Cost of Ownership?

   Hint

   Think about all expenses involved in owning a piece of equipment.

2. 2.

   Why is it important for equipment to pay for itself?

   Hint

   Consider how equipment impacts overall project costs.

3. 3.

   What does 'equipment must pay for itself' mean?

   • It should be cheap
   • It must cover its costs from project savings
   • It's always a good investment

   Hint

   Think about the reasons for investing in equipment.

4. 4.

   True or False: A contractor should own every possible piece of equipment for all tasks.

   • True
   • False

   Hint

   Consider practicality regarding equipment ownership.

5. 5.

   A construction contractor owns an older model excavator that costs $5,000 annually in maintenance. They are considering a new model that costs$10,000 but has lower operational costs due to better efficiency. Analyze whether they should keep the old model or switch.

   Hint

   Focus on the overall cost comparison rather than just the initial purchase price.

6. 6.

   A specialized machine required for a project costs $300,000. The project has a contract value of$500,000, but other projects might arise. Discuss how the contractor should proceed in terms of procurement and future job consideration.

   Hint

   Think about how multiple projects can distribute the cost of the equipment.