Intermediate Equipment Handbook
Intech Associates
1.2 EQUIPMENT COST COMPONENTS
There are a number of components to equipment costing which must be fully
appreciated and accommodated in any full and realistic costing of a piece of
equipment.
The Cost Components to be considered:
OWNERSHIP
Finance/Opportunity cost of capital
Depreciation/Replacement/Amortisation
OPERATING
Spares and consumables
Workshop costs
Fuel and lubricants
Operators’ payments, allowances & other costs
OTHER
Overheads
Risk (e.g. late payment)
Profit
Some of these components are discussed in detail in the following sections.
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