2.2 - Value of Equipment Compared to Contract Value
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Practice Questions
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Define contract value in the context of construction.
💡 Hint: Think about what the contractor agrees to be paid.
What is the total cost of ownership?
💡 Hint: Consider all the financial aspects related to owning equipment.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What should a contractor consider before purchasing high-end equipment?
💡 Hint: Think about the likelihood of subsequent jobs after this contract.
True or False: The total cost of ownership includes only the purchase price of the equipment.
💡 Hint: Consider how equipment costs accumulate over its lifecycle.
1 more question available
Challenge Problems
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You are a project manager contemplating purchasing a tunnel boring machine for $5 million. The project contract is worth $3 million, and you foresee potential projects over the next 5 years that could utilize the machine. What factors should you consider in your analysis?
💡 Hint: Think about how often the machine could be used in future contracts.
A contractor bought a specialized piece of equipment for $1 million. After five years, its maintenance costs increase significantly. Discuss the factors that could indicate the need for replacement versus continuing to use the equipment.
💡 Hint: Assess if the equipment's benefits are still outweighing the costs.
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