PEV paper - Decommissioning cost in Life Cycle question

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:26AM in AAT student discussion
Can someone please let me know what they did with this? Was it included with one or both of the options for rental and purchase?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    never really learned about that, personally I included it in the purchases one for the fun of it, I don't believe I covered anything in such depth like that at study, hopefully it won't be worth too many marks!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    I including it for both options because i had no idea whatit was!!! Never been taught it! xx
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    I including it for both options because i had no idea whatit was!!! Never been taught it! xx
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    Mee too i included it for both options... :lol:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    Hi,

    I included it in both options as well because I was working on the assumption that even if you only rent the machine, there is still a cost to uninstall and get rid of the machine after.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    hi guys-

    Asked my tutor today and aparently we should have only included it in the purchase options as its a cost incurred when disposing of the asset- (Well something like that anyway)

    Looks like i made another balls up!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question


    Yes, but is your tutor right...?

    Only joking. Trying to stay positive!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    As far as I can remember, I'm sure it said that the maintenance and the decommissioning applied to both the options. After trying to find what months figures I was supposed to be using :evil: then assumed it was Novembers, I read the questions over and over....Anyway, it's done now and I for one feel like I screwed it up :lol::lol:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    Good point Helen- he probably isnt!!!

    I asked him what that bit at the bottom meant which said ignore the time value of money as i didnt relate it oi anything and he said to just ignore it- lets hope so because thats exactly what i did!!!

    One girl said that she interpreted it as not to include the depreciation as obviosly the asset will loose value over the years?? I forgot to put my depreciation in so hopefully it did mean that!!! Oh well eh!!

    Cant wait until Thursays over with- anyone fancy getting hammered?!!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question


    I can't remember what I did about depreciation.

    I'm now getting myself confused with everyone else's answers!

    Time for a chill.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    The question was:

    Calculate the lifecycle cost of the TWO options outlined in the data.

    Assume under both options that:

    maint cost of the machine is 50k per annum.
    decommission costs is 100k
    Machine is used for 10 years.

    Ignore the time value for money and opportunity costs when calculating the answer.

    I think the decomm costs are only to buying the asset...thats 1 mark lost for me :cry:

    Well at least i showed the breakdown and method...
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    i included it too.........wasnt quite sure what to do with it !!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question
    Ntensity wrote:
    The question was:

    Calculate the lifecycle cost of the TWO options outlined in the data.

    Assume under both options that:

    maint cost of the machine is 50k per annum.
    decommission costs is 100k
    Machine is used for 10 years.

    Ignore the time value for money and opportunity costs when calculating the answer.

    I think the decomm costs are only to buying the asset...thats 1 mark lost for me :cry:

    Well at least i showed the breakdown and method...

    I so didn't read that question properly. oh well
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PEV paper - Decommissioning cost in Life Cycle question

    i added back to the purchase option the scrap value of the machine in its life cycle cost.....
    I think this is probably wrong, and i haven't seen any one else say that they've done it.
    oops :?

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