Average Investment if Salvage Value is not 0 Calculator

✖Salvage value is the book value of an asset after all depreciation has been fully expensed.ⓘ Salvage [S_s]			+10% -10%
✖Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.ⓘ Useful Life [n]			+10% -10%
✖Capital Cost is fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.ⓘ Capital Cost [P_Capital]			+10% -10%

✖Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation.ⓘ Average Investment if Salvage Value is not 0 [I_a]

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Average Investment if Salvage Value is not 0 Solution

STEP 0: Pre-Calculation Summary

Formula Used

Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life)
I_a = (S_s*(n-1)+P_Capital*(n+1))/(2*n)
This formula uses 4 Variables

Variables Used

Average Investment - Average Investment is the money which is spent on purchasing an equipment. The average is considered because the capital may not be same due to depreciation.
Salvage - Salvage value is the book value of an asset after all depreciation has been fully expensed.
Useful Life - (Measured in Year) - Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.
Capital Cost - Capital Cost is fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.

STEP 1: Convert Input(s) to Base Unit

Salvage: 456 --> No Conversion Required
Useful Life: 5 Year --> 5 Year No Conversion Required
Capital Cost: 1999 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

I_a = (S_s*(n-1)+P_Capital*(n+1))/(2*n) --> (456*(5-1)+1999*(5+1))/(2*5)

Evaluating ... ...

I_a = 1381.8

STEP 3: Convert Result to Output's Unit

1381.8 --> No Conversion Required

FINAL ANSWER

1381.8 <-- Average Investment

(Calculation completed in 00.004 seconds)

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Created by Chandana P Dev

NSS College of Engineering (NSSCE), Palakkad

Chandana P Dev has created this Calculator and 500+ more calculators!

Verified by Mithila Muthamma PA

Coorg Institute of Technology (CIT), Coorg

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< Management of Construction Equipment Calculators

Average Investment when Salvage value is 0

LaTeX Go Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost

Book Value for New Machine

LaTeX Go Book Value = (Hourly Depreciation*Life Span)/0.9

Life Span of Machine

LaTeX Go Life Span = 0.9*Book Value/Hourly Depreciation

Hourly Depreciation

LaTeX Go Hourly Depreciation = 0.9*Book Value/Life Span

Average Investment if Salvage Value is not 0 Formula

LaTeX Go

Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life)
I_a = (S_s*(n-1)+P_Capital*(n+1))/(2*n)

What are the factors affecting the Cost of Owning and Operating the Construction Equipment?

The different major costs contributing to the cost of owning and operating construction equipment are as follows:
1. Depreciation Cost
2. Investment Cost
3. Maintenance and Repair Cost
4. Operation Costs
a. Repair charges
b. Depreciation on tyres and tubes
c. Labour charges
d. Fuel charges
e. Operation and maintenance crew charges
f. Miscellaneous supplies
5. Downtime Cost
6. Obsolescence Cost
7. Replacement Cost

What is Salvage Value?

Salvage Value is the book value of an asset after all depreciation has been fully expensed. The salvage value of an asset is based on what a company expects to receive in exchange for selling or parting out the asset at the end of its useful life. An asset's estimated salvage value is an important component in the calculation of a depreciation schedule.

How to Calculate Average Investment if Salvage Value is not 0?

Average Investment if Salvage Value is not 0 calculator uses Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life) to calculate the Average Investment, The Average Investment if Salvage Value is not 0 formula is defined as the money which is invested to purchase equipment. Since the capital value does not remain the same due to depreciation, an average value of an investment is always calculated. Average Investment is denoted by I_a symbol.

How to calculate Average Investment if Salvage Value is not 0 using this online calculator? To use this online calculator for Average Investment if Salvage Value is not 0, enter Salvage (S_s), Useful Life (n) & Capital Cost (P_Capital) and hit the calculate button. Here is how the Average Investment if Salvage Value is not 0 calculation can be explained with given input values -> 1381.8 = (456*(157784760-1)+1999*(157784760+1))/(2*157784760).

FAQ

What is Average Investment if Salvage Value is not 0?

The Average Investment if Salvage Value is not 0 formula is defined as the money which is invested to purchase equipment. Since the capital value does not remain the same due to depreciation, an average value of an investment is always calculated and is represented as I_a = (S_s*(n-1)+P_Capital*(n+1))/(2*n) or Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life). Salvage value is the book value of an asset after all depreciation has been fully expensed, Useful Life is termed as an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation & Capital Cost is fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.

How to calculate Average Investment if Salvage Value is not 0?

The Average Investment if Salvage Value is not 0 formula is defined as the money which is invested to purchase equipment. Since the capital value does not remain the same due to depreciation, an average value of an investment is always calculated is calculated using Average Investment = (Salvage*(Useful Life-1)+Capital Cost*(Useful Life+1))/(2*Useful Life). To calculate Average Investment if Salvage Value is not 0, you need Salvage (S_s), Useful Life (n) & Capital Cost (P_Capital). With our tool, you need to enter the respective value for Salvage, Useful Life & Capital Cost and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

How many ways are there to calculate Average Investment?

In this formula, Average Investment uses Salvage, Useful Life & Capital Cost. We can use 1 other way(s) to calculate the same, which is/are as follows -

Average Investment = ((1+Useful Life)/(2*Useful Life))*Capital Cost

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