Equipment Cost
- purchase expense
- salvage value
- tax savings from depreciation
- major repairs and overhauls
- property taxes
- insurance
- storage
Depreciation can be calculated several ways, the simplest is the straight-line method. The annual depreciation is constant, reducing the equipment value annually. The following are simple equations paraphrased from the Peurifoy & Schexnayder text:
|
m = some year in the future N = equipment useful life (years) and Dn = Annual depreciation amount
Book value (BV) in year m
|
example: N = 5 purchase price = $350,000 m = 3 years from now
|
Read more about this topic: Heavy Equipment (construction)
Famous quotes containing the words equipment and/or cost:
“Dr. Scofield’s equipment, which you have just seen, radiated waves direct to Professor Houghland’s laboratory. When these waves came in contact with those the professor’s equipment was radiating, they created the interstellar frequency, which is the death ray.”
—Joseph O’Donnell, and Clifford Sanforth. Arthur Perry (Bela Lugosi)
“Now that is the wisdom of a man, in every instance of his labor, to hitch his wagon to a star, and see his chore done by the gods themselves. That is the way we are strong, by borrowing the might of the elements. The forces of steam, gravity, galvanism, light, magnets, wind, fire, serve us day by day and cost us nothing.”
—Ralph Waldo Emerson (1803–1882)