1. What is the Life Span Formula?

The Life Span formula estimates the usage period or total life of a machine based on its book value and hourly depreciation rate. This calculation helps in determining the expected operational life of machinery equipment.

2. How Does the Calculator Work?

The calculator uses the Life Span equation:

Where:

• \( Ls \) — Life Span (in Hours)
• \( Cbv \) — Book Value (includes cost of equipment, taxes, insurance and carriage charge)
• \( Dh \) — Hourly Depreciation (depreciation value chargeable to work on hourly basis)

Explanation: The formula calculates the expected life span by taking 90% of the ratio between the machine's book value and its hourly depreciation rate.

3. Importance of Life Span Calculation

Details: Accurate life span estimation is crucial for maintenance planning, budgeting for equipment replacement, and calculating the total cost of ownership for machinery assets.

4. Using the Calculator

Tips: Enter book value in currency units and hourly depreciation in currency/hour. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Why is there a 0.9 multiplier in the formula?
A: The 0.9 multiplier accounts for practical operational factors that may reduce the theoretical maximum life span of machinery.

Q2: What components are included in book value?
A: Book value includes the original cost of equipment, taxes, insurance costs, and carriage charges associated with the machinery.

Q3: How is hourly depreciation determined?
A: Hourly depreciation is calculated based on the depreciation value of new machines that can be charged to work on an hourly basis.

Q4: Are there limitations to this calculation?
A: This calculation provides an estimate and may not account for unexpected breakdowns, maintenance quality, or changing operational conditions.

Q5: Can this formula be used for all types of machinery?
A: While generally applicable, specific machine types may have different depreciation patterns that could affect accuracy.