Capital Cost when Salvage Value is 0 Solution

STEP 0: Pre-Calculation Summary
Formula Used
Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life)
PCapital = (2*n*Ia)/(1+n)
This formula uses 3 Variables
Variables Used
Capital Cost - Capital Cost is fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.
Useful Life - (Measured in Hour) - Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.
Average Investment - Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation.
STEP 1: Convert Input(s) to Base Unit
Useful Life: 5 Year --> 43829.1 Hour (Check conversion here)
Average Investment: 1000 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
PCapital = (2*n*Ia)/(1+n) --> (2*43829.1*1000)/(1+43829.1)
Evaluating ... ...
PCapital = 1999.95436925766
STEP 3: Convert Result to Output's Unit
1999.95436925766 --> No Conversion Required
FINAL ANSWER
1999.95436925766 1999.954 <-- Capital Cost
(Calculation completed in 00.004 seconds)

Credits

Created by Chandana P Dev
NSS College of Engineering (NSSCE), Palakkad
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11 Management of Construction Equipment Calculators

Average Investment if Salvage Value is not 0
Go Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life)
Horsepower given Quantity of Oil
Go Engine power = (Quantity of Oil-(Crankcase Capacity/(5*Time between Change of Oil)))*(0.74/(0.0027*Operating Factor))
Quantity of Lubricating Oil
Go Quantity of Oil = (Engine power*Operating Factor*0.0027/0.74)+(Crankcase Capacity/(5*Time between Change of Oil))
Capacity of Crankcase when Quantity of Oil is Determined
Go Crankcase Capacity = 5*Time between Change of Oil*(Quantity of Oil-(Engine power*Operating Factor*0.0027/0.74))
Average Investment when Salvage value is 0
Go Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost
Capital Cost when Salvage Value is 0
Go Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life)
Depreciation Cost when Straight Line Method is Assumed
Go Depreciation = (Total Cost-Scrap Value)/Useful Life
Book Value for New Machine
Go Book Value = (Hourly Depreciation*Life Span)/0.9
Life Span of Machine
Go Life Span = 0.9*Book Value/Hourly Depreciation
Hourly Depreciation
Go Hourly Depreciation = 0.9*Book Value/Life Span
Hourly Cost Worker
Go Hourly Cost = 12*Monthly Salary/Machine Hours

Capital Cost when Salvage Value is 0 Formula

Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life)
PCapital = (2*n*Ia)/(1+n)

What are the factors affecting the Cost of Owning and Operating the Construction Equipment?

The different major costs contributing to the cost of owning and operating construction equipment are as follows:
1. Depreciation Cost
2. Investment Cost
3. Maintenance and Repair Cost
4. Operation Costs
a. Repair charges
b. Depreciation on tyres and tubes
c. Labour charges
d. Fuel charges
e. Operation and maintenance crew charges
f. Miscellaneous supplies
5. Downtime Cost
6. Obsolescence Cost
7. Replacement Cost

What is Salvage Value?

Salvage Value is the book value of an asset after all depreciation has been fully expensed. The salvage value of an asset is based on what a company expects to receive in exchange for selling or parting out the asset at the end of its useful life. An asset's estimated salvage value is an important component in the calculation of a depreciation schedule.

How to Calculate Capital Cost when Salvage Value is 0?

Capital Cost when Salvage Value is 0 calculator uses Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life) to calculate the Capital Cost, The Capital Cost when Salvage Value is 0 formula is defined as a fixed, one-time expense incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services. In other words, it is the total cost needed to bring a project to a commercially operable status. Capital Cost is denoted by PCapital symbol.

How to calculate Capital Cost when Salvage Value is 0 using this online calculator? To use this online calculator for Capital Cost when Salvage Value is 0, enter Useful Life (n) & Average Investment (Ia) and hit the calculate button. Here is how the Capital Cost when Salvage Value is 0 calculation can be explained with given input values -> 1999.954 = (2*157784760*1000)/(1+157784760).

FAQ

What is Capital Cost when Salvage Value is 0?
The Capital Cost when Salvage Value is 0 formula is defined as a fixed, one-time expense incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services. In other words, it is the total cost needed to bring a project to a commercially operable status and is represented as PCapital = (2*n*Ia)/(1+n) or Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life). Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation & Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation.
How to calculate Capital Cost when Salvage Value is 0?
The Capital Cost when Salvage Value is 0 formula is defined as a fixed, one-time expense incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services. In other words, it is the total cost needed to bring a project to a commercially operable status is calculated using Capital Cost = (2*Useful Life*Average Investment)/(1+Useful Life). To calculate Capital Cost when Salvage Value is 0, you need Useful Life (n) & Average Investment (Ia). With our tool, you need to enter the respective value for Useful Life & Average Investment and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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