Intermediate Equipment Handbook
Intech Associates
1.3 EQUIPMENT COSTING ISSUES
Accurate equipment costing depends on a large range of factors as indicated in
Figure 1.1. Many of these factors vary over time and a number of the influences
can be outside the control of the equipment owner, e.g. finance costs, inflation,
foreign exchange rate fluctuation, fuel costs, imported spares costs, etc..
Furthermore predictions have to be made up to 15 or more years ahead on
issues such as expected equipment life, availability or cost of funding (interest
rates), market for the equipment and probably most importantly; Utilisation.
An investment in equipment certainly carries considerable risk.
This section considers some of the factors which may have a significant effect
on real equipment costs, losses or profits for a contractor, or performance of a
road authority.
Ownership costs
Foreign currency components
Exchange rate fluctuations & inflation
Cost and availability of finance
Economic life
Utilisation
Market considerations
October 2012
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