Construction Management
5th Edition
ISBN: 9781119256809
Author: Daniel W. Halpin, Bolivar A. Senior, Gunnar Lucko
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 3RQE
To determine
Calculate the rate of return (ROR) of the contractor using the given data.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
5. Assume a project where all possible receipts and payments, including the retention, are due one month after the project ends. For this project, the total amount of cash generated one month after the project
have been received and all bills have been paid) will be equal to
a. Gross profit
b. Net profit
c. Project contract amount
d. General overhead
over (when all payments
An industrial plant bought a generator set for 90,000. Other expenses including installation amounted to 10,000. The generator set is to have a life of 17 years with a salvage value equivalent to 5.5% of the initial cost.Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the:a. Straight Line Methodb. declining balance methodC. sinking fund method at 12% and d. Sum of Years Digit method
Given the following data for a construction equipment: Initial cost = P 1,200,000.00; Economic Life = 12 years; Estimated salvage value = P 320,000.00.
(a) What is the book value after seven years?
(b) What is the depreciation charge on the 4th year?
(c) What is the total depreciation charge at the end of the 10th year?
Chapter 12 Solutions
Construction Management
Knowledge Booster
Similar questions
- The activities involved in the construction of a small building are given below. The price of the work contained in each activity is listed in the table. The contractor undertaking this project would like you to prepare graphs of cumulative expense and income to date against time for activities starting as early as possible. The mark-up is 10% of tender value and retention is 5%. Measurement is made monthly with a payment delay of one month. The retention is paid at the end of the contract. To simplify the calculations, you may assume that all costs must be met by the end of the month in which they are incurred. What is the maximum amount of cash the contractor needs to execute this contract and when does he require this amount? No. Activity Duration (months) Predecessors Overlap Value (LE) 10 20 30 40 50 60 Excavation Concrete bases Erect frames Concrete floor slab Fix cladding Install plant 2 3 1.5 1 1.5 1 - 10 20 20 30 40, 50 - 1 1 1 1 - 9000 12000…arrow_forwardA building was constructed at a cost of P 1 000 000. This building was estimated to have a useful life of 50 years with no scrap value. How much is the building worth at the end of 40 years if depreciation charges had been set as follows: double declining for the first 15 years; SYD for the succeeding 15 years and straight line method for the next succeeding 10 years.arrow_forwardThe formulas for depreciation method A is almost the same with depreciation method B except that in A, 2/n (where n is the life of the asset) is used in place of k in method B. What is depreciation method A? Declining Balance Method Sum of Years' Digit Method Sinking Fund Method Straight-Line Method Double Declining Balance Methodarrow_forward
- You have just bought a used track-type tractor to add to yourproduction fleet. The initial capitalized value of the tractoris $110,000. The estimated service life remaining on thetractor is 10,000 hours and the anticipated operating conditionsacross the remainder of its life are normal. The salvagevalue of the tractor is $12,000. The tractor was purchasedon July 1, 1997. a. What amount of depreciation will you claim for eachcalendar year between 2007 and 2010?b. What percent of the total depreciable amount is taken inthe first year?c. The IIT components of ownership cost based on averageannual value are:Tax: 3%Insurance: 2%Interest: 8%What cost per hour of operation would you charge tocover IIT?d. If the total average operating cost for the tractor is$23.50 per hour and the amount of overhead cost proratedto this tractor for the year is $4,000, what would beyour total hourly cost for the operation of the tractor(during the first year of its service life)?arrow_forwardUsing declining-balance depreciation with d = 18 percent, what is the depreciation charge in the 9 year for an asset costing $156400?arrow_forwardA machine was purchased for $ 8,000, with an estimated useful life of 10 years, and it has a scrap value of $ 1,000 and rate of interest = %1O. Calculate the following: The book value at the end of the ninth year using Sum of the Years- Digits method. * The book value at the end of the fourth year using constant percentage method. * The depreciation installment for the sixth year using straight line method. *arrow_forward
- Given: C, = 10,000.00 C, = 500.00 n = 5 years Tabulate the annual depreciation charge and book value after 5 years so that you can identify what method has the largest annual depreciation charge: a) SLM b) SFM (assume 10% interest) c) DBM d) SYDMarrow_forwardA mechanical engineer bought an equipment for $500,000.00 and the same has an economic life of 5 years, and with a salvage value of $100,000.00. Construct a depreciation table. What was the depreciation during 5th yr and the book value at the end of 5th year? Explain your answer. (Use double declining balance method).arrow_forwardWhich of the following is/are accelerated methods of depreciation: (A) Straight- Line Method; (B) Sinking Fund Method; (C).Sum of Years' Digit Method; (D) Declining Balance Method; (E) Double Declining Balance Method C and E B and C A and B O C onlyarrow_forward
- SUBJECT: ENGINEERING ECONOMYTOPIC: DEPRECIATION SHOW THE COMPLETE AND DETAILED SOLUTION OF THIS PROBLEM. THANK YOU EXPERTS. D) A radio service panel truck initially costs P560,000. Its resale value at the end of the 5th year of the useful life is estimated at P150,000. Determine the depreciation charge for the first year using the declining balance method.arrow_forwardThe purchase cost of an excavating machine is $200,750. After a useful life of 6 years, it is assumed the equipment will be sold for $45,000. Assume interest of 9.5% for borrowing money and 3.2% for taxes, insurance and storage. Using the sinking fund depreciation method, calculate the annual ownership cost in Year 2 and the cost per hour in Year 1, assuming the equipment will be used for 2000 hr/year.arrow_forwardQuestion 1. Answer the following: A. When the price =70000-200(Demand), the maximum total revenue B. The installation cost of a machine is $5000 with estimated life of 8 years and selvage value of $1500 at the end of the 8th year. What will be the annual depreciation cost in the fourth year (using straight line method)? C. Figure (1) shows a cash flow diagram depicting a uniform series of five beginning-of- period cash flows of $1000 each. The present worth of the $1000 the beginning of the first period equals to......... A=$1000 1 2 3 4 5 i=%10 compounded annually Figure 1 D. The Present worth (PW) of five annual payment of $6000 paid at the end of the first five years with interest rate of % 24 compounded monthly is........... Question 2 For an engineering project, the following payments have been estimated to be paid at their certain time as follow: The initial construction cost of a project is $300000 which should be paid at the beginning of the construction period (time =0). Extra…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Structural Analysis (10th Edition)Civil EngineeringISBN:9780134610672Author:Russell C. HibbelerPublisher:PEARSON
Principles of Foundation Engineering (MindTap Cou...Civil EngineeringISBN:9781337705028Author:Braja M. Das, Nagaratnam SivakuganPublisher:Cengage Learning
Fundamentals of Structural AnalysisCivil EngineeringISBN:9780073398006Author:Kenneth M. Leet Emeritus, Chia-Ming Uang, Joel LanningPublisher:McGraw-Hill Education
Traffic and Highway EngineeringCivil EngineeringISBN:9781305156241Author:Garber, Nicholas J.Publisher:Cengage Learning
Structural Analysis (10th Edition)
Civil Engineering
ISBN:9780134610672
Author:Russell C. Hibbeler
Publisher:PEARSON
Principles of Foundation Engineering (MindTap Cou...
Civil Engineering
ISBN:9781337705028
Author:Braja M. Das, Nagaratnam Sivakugan
Publisher:Cengage Learning
Fundamentals of Structural Analysis
Civil Engineering
ISBN:9780073398006
Author:Kenneth M. Leet Emeritus, Chia-Ming Uang, Joel Lanning
Publisher:McGraw-Hill Education
Traffic and Highway Engineering
Civil Engineering
ISBN:9781305156241
Author:Garber, Nicholas J.
Publisher:Cengage Learning