4 - Estimating Ownership Cost Using Time Value Concepts
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
What is the purpose of the Capital Recovery Factor?
💡 Hint: Think about loan repayments over time.
What does Ownership Cost refer to?
💡 Hint: Consider what expenses are involved in running equipment.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does CRF help you determine in financial terms?
💡 Hint: Think about the uniform amount it provides.
True or False: The Present Worth Factor can help determine how much cash you need today to generate future cash flows.
💡 Hint: Remember what the factor represents.
Get performance evaluation
Challenge Problems
Push your limits with advanced challenges
A drill costs ₹150 lakhs, has an estimated life of 15 years, and a salvage value of ₹25 lakhs. Calculate the annualized ownership cost including a tax rate of 3%, storage of 1.5% of the purchase price, and operating hours of 3000 per year.
💡 Hint: Remember to factor in all cost percentages to the annualized amount.
If a company wishes to earn ₹2 lakhs annually from their investment for the next 20 years at an interest rate of 5%, what is the present worth needed now?
💡 Hint: Refer back to the formula for calculating present worth.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.