CEC Construction Equipment Costs & Ownership 2

Question 1

Which of the following best describes the 'standby rate' for rented construction equipment?

Accepted Answer

A reduced rate charged when equipment is on-site but not operating

Answer

The full rental rate charged when equipment is actively working

Answer

The rate charged for transporting equipment to a new job site

Answer

A penalty rate for equipment returned after the rental period

Question 2

The 'ownership and operating (O&O) cost' method for pricing equipment use is most closely associated with which reference publication?

Accepted Answer

Caterpillar Performance Handbook

Answer

RSMeans Building Construction Cost Data

Answer

Associated General Contractors (AGC) Manual

Answer

ENR Construction Cost Index

Question 3

When estimating equipment costs for a project in a remote location, which additional cost factor is most important to include?

Accepted Answer

Mobilization and demobilization costs

Answer

Manufacturer extended warranty costs

Answer

Reduced fuel consumption due to lower traffic

Answer

Decreased operator wages in rural areas

Question 4

Which factor most directly affects the hourly fuel cost estimate for a piece of heavy equipment?

Accepted Answer

The engine horsepower and load factor

Answer

The equipment's purchase price and age

Answer

The operator's experience and skill level

Answer

The manufacturer's recommended service intervals

Question 5

An estimator is comparing owning versus renting a concrete pump for a project. If the breakeven point is 1,200 hours per year, what should the estimator recommend if annual usage is projected at 800 hours?

Accepted Answer

Rent the pump because usage is below the breakeven point

Answer

Purchase the pump because it provides better control

Answer

Purchase the pump because maintenance costs will be lower

Answer

Rent the pump only for the first year, then purchase

Question 6

Which of the following is NOT typically included when calculating the 'cost of investment' component of equipment ownership cost?

Accepted Answer

Daily fuel cost while operating

Answer

Interest rate on borrowed capital

Answer

Opportunity cost of equity investment

Answer

Average book value of the equipment

Question 7

The average investment method for calculating equipment interest cost uses which value as its base?

Accepted Answer

The average of the initial cost and salvage value

Answer

The full purchase price of the equipment

Answer

The current replacement cost of equivalent equipment

Answer

The remaining book value at the time of estimate