Problem 7 Illustrate which of the following sentences is true or false: a. Under the tax system of the U.S., an owner can reduce his compa burden. b. Capacity in construction contracts means that at least one of the par be of sufficient age to enter into a contract. c. Equipment costs rank second to labor cost in terms of uncertainty.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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Problem 7
Illustrate which of the following sentences is true or false:
a. Under the tax system of the U.S., an owner can reduce his company's tax
burden.
b. Capacity in construction contracts means that at least one of the parties must
be of sufficient age to enter into a contract.
c. Equipment costs rank second to labor cost in terms of uncertainty.
d. The optimum moisture content is the percent of water, at a given compaction
effort, which corresponds to the maximum void ratio of the soil.
e. In situ is a term that refers to soil in its original or undisturbed condition.
f. Diesel engines have longer service lives than gasoline engines.
g. A bulldozer has no set volumetric capacity.
h. Nuclear compaction test is nondestructive in that it does not require the
removal of soil samples from the site of the tests.
i. Hydraulic front shovels are used primarily to excavate above the natural
surface of the ground.
j. Regardless of how much a machine is used, the owner must pay owning cost.
k. Construction contracts must contain four legal items to be valid: agreement,
consideration, capacity and legality.
1. Equipment Cost = Ownership Cost + Operating Cost.
Problem 8
Fill in the blanks
1. List two general types of construction contracts:-----,----
2. In addition to purchase, equipment may be employed by the following two
means:--
3. Name four types of soil:----
4. ASTM stands for:--
5. Dozers are mainly classified into two types:-------,------
6.
--- is the key to the utility of many excavators.
Problem
A contractor is considering the following three alternatives:
a. Purchase a new microcomputer system for $15,000. The system is expected
6 years with salvage value of $1,000.
b. Lease a new microcomputer system for $3,000 per year, payable in advance. The
system should last 6 years.
c. Purchase a used microcomputer system for $8,200. It is expected to last 3 years
with no salvage value.
Use a common-multiple-of-lives approach. If MARR of 8% is used, which
alternative should be selected using a discounted present worth analysis? If the
MARR is 12%, which alternate should be selected?
last
Transcribed Image Text:Problem 7 Illustrate which of the following sentences is true or false: a. Under the tax system of the U.S., an owner can reduce his company's tax burden. b. Capacity in construction contracts means that at least one of the parties must be of sufficient age to enter into a contract. c. Equipment costs rank second to labor cost in terms of uncertainty. d. The optimum moisture content is the percent of water, at a given compaction effort, which corresponds to the maximum void ratio of the soil. e. In situ is a term that refers to soil in its original or undisturbed condition. f. Diesel engines have longer service lives than gasoline engines. g. A bulldozer has no set volumetric capacity. h. Nuclear compaction test is nondestructive in that it does not require the removal of soil samples from the site of the tests. i. Hydraulic front shovels are used primarily to excavate above the natural surface of the ground. j. Regardless of how much a machine is used, the owner must pay owning cost. k. Construction contracts must contain four legal items to be valid: agreement, consideration, capacity and legality. 1. Equipment Cost = Ownership Cost + Operating Cost. Problem 8 Fill in the blanks 1. List two general types of construction contracts:-----,---- 2. In addition to purchase, equipment may be employed by the following two means:-- 3. Name four types of soil:---- 4. ASTM stands for:-- 5. Dozers are mainly classified into two types:-------,------ 6. --- is the key to the utility of many excavators. Problem A contractor is considering the following three alternatives: a. Purchase a new microcomputer system for $15,000. The system is expected 6 years with salvage value of $1,000. b. Lease a new microcomputer system for $3,000 per year, payable in advance. The system should last 6 years. c. Purchase a used microcomputer system for $8,200. It is expected to last 3 years with no salvage value. Use a common-multiple-of-lives approach. If MARR of 8% is used, which alternative should be selected using a discounted present worth analysis? If the MARR is 12%, which alternate should be selected? last
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