(55 marks) QUESTION 3 (125 marks total) An engineering asset that costs $150,000

Question

(55 marks) QUESTION 3 (125 marks total) An engineering asset that costs $150,000 has a five (5) year useful life and can be sold for $30,000 at the end of its life (a) Using two (2) of the main methods of asset depreciation, show how you can calculate the amount by which this asset depreciates in value over each year of its life. You should be able to describe each method and show how it is used to calculate depreciation of this asset. You do not need to calculate the depreciation values. (60 marks) Define and discuss three (3) of the following concepts used in asset operations, maintenance and renewal, relating them to an example asset (for example, road, distribution network, manufacturing facility, information system): (b) . demand forecasting demand management . maintainability reliability-centred maintenance. (65 marks)

Explanation / Answer

Part a:

The two main asset depreciation method that can be used are:

Straight-line method

Declining balance depreciation:

Part b:

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