2.3. Owning and Renting Equipment

Try these first

1. 1.

   What is one advantage of renting equipment?

   Hint

   Think about expenses and commitments related to ownership.

2. 2.

   List one cost associated with owning equipment.

   Hint

   Consider what happens when equipment ages.

3. 3.

   What is one primary consideration when deciding to own or rent construction equipment?

   • A. Weather conditions
   • B. Economic analysis
   • C. Equipment color

   Hint

   'Economic' involves assessing costs and benefits.

4. 4.

   True or False: Renting equipment eliminates all ownership costs.

   • True
   • False

   Hint

   Does renting entirely remove costs?

5. 5.

   A company is considering purchasing a high-end crane for $500,000. The crane will have ongoing operating costs of$50,000 per year, including maintenance and insurance. Alternatively, renting the crane costs $30,000 a month. Calculate the breakeven point when renting becomes more cost-effective.

   Hint

   Set the costs of renting equal to the costs of owning and solve for x.

6. 6.

   Evaluate a scenario where a contractor chooses to rent a specialized machine for a small project over purchasing it. List factors that could influence this decision.

   Hint

   Think about how often the equipment will be needed and the total cost of ownership.