Intermediate Equipment Handbook
Intech Associates
finance the purchase? Is finance available? At what cost?
Will it be a cash purchase or will at least part of the procurement require
financing? Is financing available? What is the cost (interest, arrangement,
other non-capital charges)? What security or capital will be required by the
lender and what are the risks involved if I have difficulty in paying, or
payments are late?
Q7 How will the equipment be maintained and repaired?
Will I maintain and repair the equipment with my own mechanics and
facilities, will I use the supplier’s mechanics or their agents, or a local
workshop? What is the quality of this support? Will the maintenance support
be on-site or will the equipment have to be taken to the workshop?
Q8 What are the ownership costs?
What are the REALISTIC costs of depreciation and finance? (see Parts 1 &
2 of this Handbook)
Be particularly careful regarding these figures because important
assumptions have to be made about economic life and annual utilisation. Be
REALISTIC in these assumptions and explore a range of assumptions.
Q9 What are the operating costs?
What are the REALISTIC costs of operation? (see Parts 1 & 2 of this
Handbook)
Will a low loader or other vehicle be needed to transport or attend the
machine?
Q10 What are the overhead costs?
What are the REALISTIC costs of all overheads? (see Parts 1 & 2 of this
Handbook)
Q11 What are the costs when it is NOT working?
What will be the costs if I do not achieve the expected rates of utilisation?
It is suggested that the cost calculations are also made for a ‘worst case’
scenario. You can then assess the costs for every hour below your target
utilisation that the machine is not working each year.
Q12 Could I hire it out when I don’t need to use it?
Is there a market to hire the machine out if I do not have work for it? What is
October 2012
83