7.1 - Overview of Equipment Cost Estimation
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Practice Questions
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What does the uniform series capital recovery factor help us determine?
💡 Hint: Think about how loans are typically repaid.
What is the ownership cost of equipment?
💡 Hint: Includes depreciation, taxes, and operational costs.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the capital recovery factor used for?
💡 Hint: Consider what happens when a loan is repaid.
True or False: The ownership cost includes only the purchase price of the equipment.
💡 Hint: Think about all costs you might incur over time.
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Challenge Problems
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An irrigation system costs $100,000. If the project's lifespan is 15 years and interest is 4%, calculate the annual payment needed to recover the initial investment. How might this affect future budgeting?
💡 Hint: Use the formula for annual payments based on the capital recovery factor.
You need $50,000 for a future project in 10 years. If you can earn 5% interest on your savings, how much should you save annually to reach this goal?
💡 Hint: Apply the sinking fund formula to find your annual deposit.
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