Test your skills
Regarding the questions below we assume a depreciation period of 20 years and an interest percentage of 7% per year.
Question 1:
We need equipment for the next 40 years. We have two alternatives to choose from:
Alternative 1:
Alternative 2:
Investment
€
1.000.000,
life span 20 years
Maintenance
€
50.000 per year
Investment
€
1.500.000,
life span 40 years
Maintenance
€
50.000 per year
Which will be the least expensive option?
Alternative 1
Alternative 2
Question 2:
We own an asset with a technical life span of 40 years. The maintenance costs are
€
2.000 per year, but we know these costs will increase explosively from the 25th year: with 20% per year progressively. The replacement costs of a new asset are
€
140.000. When will be the optimum replacement moment?
After 25 years
After 21 years
After 36 years
After 40 years
Question 3:
The cost for the revision of an asset will be
€
10.000. The yearly maintenance costs in the year after revision are
€
2.000 but will increase every year with 10% progressively. What is the optimum revision frequency from an economic point of view?
After 2 years
After 4 years
After 6 years
After 8 years
After 12 years
Question 4:
A vital component of an industrial system has broken down. Replacing the entire system will cost
€
100.000.
The life span of the system is 35 years. The system is 30 years old now, so the system has to be replaced in about 5 years anyway.
Replacing the broken component will cost
€
30.000. Does replacing the broken component still make sense in this case?
Yes, it still makes sense to replace the component
No, the entire system has to be replaced now
Question 5:
How much money can be spent on a revision of an asset with a life span of 40 years to extend the life span with 10 years?
20% of the replacement value
30% of the replacement value
40% of the replacement value
50% of the replacement value