There are a variety of costs to be considered in an engineering economic analysis. These costs are differ in their frequency of occurrence, relative magnitude, and degree of impact on the study. Explain any FOUR (4) type of costs that associated with products or services in construction activities. OPEN-ENDED C2

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter17: Long-term Investment Analysis
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Problem 10E
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Q2
(a)
There are a variety of costs to be considered in an engineering economic analysis.
These costs are differ in their frequency of occurrence, relative magnitude, and
degree of impact on the study. Explain any FOUR (4) type of costs that associated
with products or services in construction activities. OPEN-ENDED C2
Last year, your company, a Gl class contractor has invested in a construction
machinery costing RM 500,000. The life cycle of machinery is about 5 years. Then
the company usually will replace with a new machinery to reduce an operation and
maintenance cost. The percentage of depreciation value (per year) are shown in
Table 1. Select ONE (1) year when you want to sell and calculate the value of sunk
cost. OPEN ENDED C3
(b)
Table 1 Percent of Depreciation Value and Sold Price
Percent of Depreciation
Value (per year)
Year
Sold Price
(RM)
2
6%
210000
3
8%
195000
4
10%
175000
5
12%
150000
Transcribed Image Text:Q2 (a) There are a variety of costs to be considered in an engineering economic analysis. These costs are differ in their frequency of occurrence, relative magnitude, and degree of impact on the study. Explain any FOUR (4) type of costs that associated with products or services in construction activities. OPEN-ENDED C2 Last year, your company, a Gl class contractor has invested in a construction machinery costing RM 500,000. The life cycle of machinery is about 5 years. Then the company usually will replace with a new machinery to reduce an operation and maintenance cost. The percentage of depreciation value (per year) are shown in Table 1. Select ONE (1) year when you want to sell and calculate the value of sunk cost. OPEN ENDED C3 (b) Table 1 Percent of Depreciation Value and Sold Price Percent of Depreciation Value (per year) Year Sold Price (RM) 2 6% 210000 3 8% 195000 4 10% 175000 5 12% 150000
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