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    Lecture 2a - Construction Equipment

    Uploaded by

    Louise Luy
    The document discusses construction methods and equipment used for earth moving, road making, piling driving, concrete work, lifting, hauling, and their costs of ownership and operation. It describes common equipment like dozers, loaders, backhoes, asphalt spreaders, rollers, graders, pile hammers, concrete mixers, pumps, cranes, dump trucks. It explains ownership costs including purchase, salvage value, depreciation, repairs, insurance, storage. Operating costs include fuel, lubrication, tires, repairs. It provides formulas to calculate depreciation and cost of capital. An example problem calculates cost of owning a loader over its lifetime.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Lecture 2a - Construction Equipment

    Uploaded by

    Louise Luy
    231 views37 pages
    The document discusses construction methods and equipment used for earth moving, road making, piling driving, concrete work, lifting, hauling, and their costs of ownership and operation. It describes common equipment like dozers, loaders, backhoes, asphalt spreaders, rollers, graders, pile hammers, concrete mixers, pumps, cranes, dump trucks. It explains ownership costs including purchase, salvage value, depreciation, repairs, insurance, storage. Operating costs include fuel, lubrication, tires, repairs. It provides formulas to calculate depreciation and cost of capital. An example problem calculates cost of owning a loader over its lifetime.

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    CE142

    Original Title

    Lecture 2a- Construction Equipment

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    The document discusses construction methods and equipment used for earth moving, road making, piling driving, concrete work, lifting, hauling, and their costs of ownership and operation. It describes common equipment like dozers, loaders, backhoes, asphalt spreaders, rollers, graders, pile hammers, concrete mixers, pumps, cranes, dump trucks. It explains ownership costs including purchase, salvage value, depreciation, repairs, insurance, storage. Operating costs include fuel, lubrication, tires, repairs. It provides formulas to calculate depreciation and cost of capital. An example problem calculates cost of owning a loader over its lifetime.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    231 views37 pages

    Lecture 2a - Construction Equipment

    Uploaded by

    Louise Luy
    The document discusses construction methods and equipment used for earth moving, road making, piling driving, concrete work, lifting, hauling, and their costs of ownership and operation. It describes common equipment like dozers, loaders, backhoes, asphalt spreaders, rollers, graders, pile hammers, concrete mixers, pumps, cranes, dump trucks. It explains ownership costs including purchase, salvage value, depreciation, repairs, insurance, storage. Operating costs include fuel, lubrication, tires, repairs. It provides formulas to calculate depreciation and cost of capital. An example problem calculates cost of owning a loader over its lifetime.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 37

    CE 142

    Construction Methods and Project Management

    Lecture 2a
    Construction Methods & Equipment

    EARTH MOVING EQUIPMENT

    DOZERS

    EARTH MOVING EQUIPMENT

    LOADER

    EARTH MOVING EQUIPMENT

    BACKHOE

    ROAD MAKING EQUIPMENT

    ASPHALT SPREADER

    ROAD MAKING EQUIPMENT

    ROLLER COMPACTOR

    ROAD MAKING EQUIPMENT

    GRADER

    PILE DRIVING EQUIPMENT

    HAMMER
    HEAD

    PILE DRIVING EQUIPMENT

    PILE DRIVING HAMMER

    CONCRETE EQUIPMENT

    SITE BAGGER MIXER

    CONCRETE EQUIPMENT

    CONCRETE
    VIBRATOR
    FINISHING
    TROWEL

    CONCRETE EQUIPMENT

    PUMPCRETE TRUCK WITH BOOM

    LIFTING AND HANDLING


    EQUIPMENT

    TOWER CRANE

    LIFTING AND HANDLING


    EQUIPMENT

    CRAWLER CRANE

    HAULING EQUIPMENT

    DUMP TRUCK

    COST OF OWNING AND


    OPERATING EQUIPMENT
    Ownership cost is the cumulative result of
    those cash flows an owner experiences
    whether or not the machine is productively
    employed on a job.

    Ownership Cost

    1. Purchase expense
    2. Salvage value
    3. Tax savings from depreciation
    4. Major repairs and overhauls
    5. Insurance
    6. Storage and miscellaneous

    Purchase Expense
    The cash outflow the firm experiences in
    acquiring of a machine is purchase expense.
    It is the total delivered cost, including
    amounts for all options, shipping, and taxes.
    The machine will show as an asset in the
    firms accounting records.

    Salvage Value
    Is the cash inflow a firm receives if a
    machine still has value at the time of
    disposal.
    This revenue will occur at a future date

    Tax Savings from Depreciation


    Depreciating a machines loss in value with
    age will lessen the net cost of machine
    ownership.
    The cost savings, the prevention of a cash
    outflow, afforded by tax depreciation is a
    result of shielding the company from taxes

    Major repairs and overhauls


    Considered as an investment in an old
    machine resulting in a an extension of a
    machines service life.

    Taxes
    Refers to those equipment ownership taxes
    that are charged by any government
    agencies.
    They are commonly assessed at a
    percentage rate applied against the book
    value of the machine.

    Insurance
    Insurance includes the cost to cover fire,
    theft, and damage to the equipment.
    Annual rate can be range from 1 to 3%.
    This cost can be actual premium payments
    to insurance companies.

    Depreciation
    Decrease in value of equipment with passage
    of time and use
    Accounting concept establishing annual
    deduction against before-tax income
    - to reflect effect of time and use on assets value in
    firms financial statements

    - to match yearly fraction of value used by asset in


    production of income over assets economic

    life

    STRAIGHT-LINE (SL) METHOD


    Simplest depreciation method
    Assumes constant amount is depreciated each year
    over depreciable (useful) life

    Dep = ( FC - SVN ) / N
    This method requires an estimate of the final SV (
    also the final book value at the end of year N )

    SINKING FUND METHOD


    ANNUAL DEPRECIATION

    A = (FC SV) i / [(1 +

    n
    i)

    1]

    TOTAL DEPRECIATION AFTER x


    YEARS

    Dep = A[(1 +i)x 1] / i

    Storage and Miscellaneous


    Between jobs or during bad weather, a
    company will require storage facilities for
    its equipment.
    The cost of maintaining storage yards and
    facilities should be prorated to those
    machines that required such harborage.

    ELEMENTS OF OPERATING
    COST

    Fuel
    Lubricants, filters and grease
    Repairs
    Tires
    Replacement of high-wear items

    COST OF OPERATING
    Fuel
    Fuel expense is best determined by
    measurement on the job.
    Accurate service records tell the owner how
    many liters of fuel a machine consumes over a
    period of time and under what job conditions

    COST OF OPERATING
    Lubricants
    The cost of lube oils, filters, and grease will
    depend on the maintenance practices of the
    company and the conditions of the work
    location.

    COST OF OPERATING
    Repairs
    Normal maintenance-type repairs.
    These are the repair expenses incurred on the
    job site where the machine is operated and
    would include the costs of parts and labor.

    COST OF OPERATING
    Tires
    Tires for wheel type equipment are a major
    operating cost because they have a short life I
    relation to the machine itself.

    COST OF OPERATING
    Replacement of High-Wear Items
    These includes clutch linings, brake pads and
    cables.

    Cost of Money / Capital


    Uniform series payment:

    A= Uniform end-of-period payments / receipts.


    P = Purchase price
    n = no of years
    i = cost of money / interest

    Cost of Money / Capital


    Uniform series sinking fund factor:

    A= Uniform end-of-period paymenrs / receipts.


    F = Sinking fund
    n = no of years
    i = cost of money / interest

    Problem Cost of Owning


    A company having a cost capital rate of 8%
    purchases a Ph3,000,000 Loader. This machine
    has an expected service life of 4year and will be
    utilized 2,500 hr per year. The tires on this
    machine cost Ph145,000. the estimated salvage
    value at the end of 4 year is Ph450,000.
    a) Calculate the depreciation portion of the
    ownership cost for this machine using sinking
    fund method.
    b) What is the cost of owning the machine?

    ASSIGNMENT
    A machine cost $45,000 to purchase. Fuel, oil grease,
    and minor maintenance are estimated to cost $12.34
    per operating hour. A set of tires cost $3,200 to
    replace, and their estimated life is 2,800 use hours. A
    $6,000 major repair will probably be required after
    4,200hr of use. The machine is expected to last for
    8,400 hr, after which it will be sold at a price equal to
    10% of the original purchase price. A final set of new
    tires will not be purchased before the sale. How much
    should the owner of the machine charge per hour of
    use, if it is expected that the machine will operate
    1,400 hr per year? The companys capital rate is 7%.

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