CPE Construction Equipment Costs & Management 1

Question 1

Which of the following is classified as an equipment OWNERSHIP cost rather than an operating cost?

Accepted Answer

Depreciation

Answer

Depreciation is an ownership cost representing the recovery of capital investment, while fuel, tires, and lubrication are operating costs incurred through use.

Question 2

Equipment standby costs in estimating typically include:

Accepted Answer

Ownership costs plus a partial allowance for operating costs

Answer

Standby costs include full ownership costs (which continue regardless of use) plus reduced operating costs for items like minimal maintenance and lubrication.

Question 3

The straight-line depreciation method calculates annual depreciation by:

Accepted Answer

Dividing cost minus salvage value by the useful life in years

Answer

Straight-line depreciation spreads the depreciable cost (purchase price minus salvage value) evenly across each year of the equipment's useful life.

Question 4

The 'economic life' of construction equipment is best defined as:

Accepted Answer

The period during which it is most cost-effective to own and operate the equipment

Answer

Economic life is the period of optimal cost-effectiveness, ending when rising repair and operating costs make replacement more economical than continued ownership.

Question 5

Which reference publication is most widely used by estimators to obtain construction equipment rental rates and depreciation schedules for cost claims?

Accepted Answer

EquipmentWatch (formerly Dataquest Blue Book)

Answer

EquipmentWatch, formerly known as the Dataquest Blue Book, is the industry-standard reference for equipment ownership costs, depreciation, and rental rate data used in claims and estimates.

(CPE) Certified Professional Estimator Practice Test

(CPE) Certified Professional Estimator Practice Test

CPE Construction Equipment Costs & Management 1