Question

The annual cost of _______________ may be determined independently or it may be linked up with the depreciated cost of the equipment by a certain fix percentage.

(a) Maintenance and repairs

(b) Depreciation cost

(c) Installation

(d) Operation cost

I had been asked this question during an interview for a job.

Enquiry is from Operating Cost of Equipment topic in section Construction Equipments of Construction & Building Materials

Answer 1

Correct option is (a) Maintenance and repairs

For explanation I would say: In any case, the cost allotted to maintenance and repairs should be at least efficient to keep the equipment in the work order. However, records of similar equipment may serve as a good guide for determining the average annual cost of maintenance and repairs.