CM 2113 ESTIMATING TOTAL EQUIPMENT
COST MODULE 2 QUIZ 2026 COMPREHENSIVE
STUDY GUIDE SOLVED QUESTION SET – CHAO
WANG
◉ T/F: Payments that differ in amount may be equal if made at different
points in time. Answer: True
◉ T/F: (P/F, i, N) stands for finding a future value given at a present
value at interest rate i for N years. Answer: False
◉ T/F: Uniform series of payments is a series of payments or receipts
that occurs at the beginning of each period for N periods. Answer: False
◉ T/F: Compared to the straight line (SL) depreciation method, Sum of
Year (SOY) depreciation method results in larger depreciation charges
during an asset's early years and smaller charges as the asset nears the
end of its depreciable life. Answer: False
◉ T/F: In the modified accelerated cost recovery system (MACRS),
salvage values are assumed to be 10% of the total purchase price.
Answer: False
◉ T/F: When calculating equipment hourly operating cost, tires cost
should be estimated separately as part of operation cost Answer: True
, ◉ T/F: Ownership costs generally increase with equipment ages because
of the repair and maintenance cost Answer: False
◉ The time value of money is based on the premise that money can
generate ___ over time. Answer: Interest
◉ A contractor plans to purchase a pickup. Select the correct equations
and factor to determine if a contractor plans to purchase a pickup in 3
year, how much should he invest at 5% interest today to have the
$55,000 needed to buy the pickup truck at the end of the 3 years?
Answer: $47,250. You need to show work, but I don't know the formula
to use.
◉ A contractor is investing $5,000 per year in savings certificates at an
annual interest of 6% and plans to continue the investment program for
20 years, what will the value of the contractor's investment be at the end
of 20 years? Answer: $183,930. You need to show work, but I don't
know the formula to use.
◉ What is the annual cost for a tractor if a contractor is considering
purchasing a tractor for $180,000 at 2% interest that she could use for 10
years and then sell for an estimated salvage value of $10,000. Annual
maintenance and repair costs for the used tractor are estimated to be
$15,000 per year. Answer: $34,070. You need to show work, but I don't
know the formula to use.
COST MODULE 2 QUIZ 2026 COMPREHENSIVE
STUDY GUIDE SOLVED QUESTION SET – CHAO
WANG
◉ T/F: Payments that differ in amount may be equal if made at different
points in time. Answer: True
◉ T/F: (P/F, i, N) stands for finding a future value given at a present
value at interest rate i for N years. Answer: False
◉ T/F: Uniform series of payments is a series of payments or receipts
that occurs at the beginning of each period for N periods. Answer: False
◉ T/F: Compared to the straight line (SL) depreciation method, Sum of
Year (SOY) depreciation method results in larger depreciation charges
during an asset's early years and smaller charges as the asset nears the
end of its depreciable life. Answer: False
◉ T/F: In the modified accelerated cost recovery system (MACRS),
salvage values are assumed to be 10% of the total purchase price.
Answer: False
◉ T/F: When calculating equipment hourly operating cost, tires cost
should be estimated separately as part of operation cost Answer: True
, ◉ T/F: Ownership costs generally increase with equipment ages because
of the repair and maintenance cost Answer: False
◉ The time value of money is based on the premise that money can
generate ___ over time. Answer: Interest
◉ A contractor plans to purchase a pickup. Select the correct equations
and factor to determine if a contractor plans to purchase a pickup in 3
year, how much should he invest at 5% interest today to have the
$55,000 needed to buy the pickup truck at the end of the 3 years?
Answer: $47,250. You need to show work, but I don't know the formula
to use.
◉ A contractor is investing $5,000 per year in savings certificates at an
annual interest of 6% and plans to continue the investment program for
20 years, what will the value of the contractor's investment be at the end
of 20 years? Answer: $183,930. You need to show work, but I don't
know the formula to use.
◉ What is the annual cost for a tractor if a contractor is considering
purchasing a tractor for $180,000 at 2% interest that she could use for 10
years and then sell for an estimated salvage value of $10,000. Annual
maintenance and repair costs for the used tractor are estimated to be
$15,000 per year. Answer: $34,070. You need to show work, but I don't
know the formula to use.
