Mechanical Equipment Estimation GuideGood80-100Fair60-79Poor40-59Very Poor0-39

Page 1
Mechanical Equipment have wide range of applications, in relation to

the nature & volume of the work & the continual technological advancement
through innovation which makes the number of equipment & models
numerous. But for our purpose of evaluation we will base on classification
related to the shared common feature among equipment & likeness of the
type of work they perform.
Considering makers' (Manufacturer's) manual, service year reliable
sales invoice, custom duty & physical assessment, comparing these with the
specification provided, if one or two of the above documents are not
available due to different reasons then comparison will be made with
similar model of replacement & repair cost, which leads to the original cost.
Deprecation cost analysis is vital which governs the existing situation of the
equipment in question.
At large the start up manual is based on the above frameworks. To
organize the estimation manual we have communicated with equipment
importer & salers like(VOLVO, CAT,HAGBES) & from governmental
offices and associations ERA (Ethiopian Road Authority) BMEI (Basic
Metals Engineering Industries) & society of Mechanical Engineers.
Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment
Page 2
For estimating equipment the methodology lies on the break down of

parts & considering the major unit from the integrated system & allocating
values worth to the unit which actually taken from the original price in
proportion.
Giving back grade factor to the individual parts with in the unit &
summing up to 100% & multiplying percentage factor by the allotted unit
price, we will get the estimated value of the unit, which intern will be added
to make up the whole equipment estimated price.
Major classification of equipment is divided into three groups
1.
Machineries
2.
Auto mobiles
3.
Earth moving equipment

The sub group & their cost summary analysis methodology is
generally sub divided into four parts

1. General data collection
2. Physical Assessment
3. Technical Specification
4. Estimation
The detail will be expressed on the chapters that will follow.
N.B. The more important aspect of the estimation manual is, it could
be modified to the situation where updating is necessary and it
would also be revised timely, broadened: to meet the required
specification.
Page 3
General Description & Basic Parameters

Mechanical Equipment have wide range of applications; but,
depending upon their particular & specific use we further classified them in
the following manner, in order to meet our purpose.
1.
Machineries
2.
Auto Mobiles
3.
Earth moving equipment.
1.1
Machineries further be classified as

-
Production
Workshop- for repairing & fabrication
Power plant
Transporting
Loading
Trucks
Cranes
Forklifts.
2.1
Auto mobiles
3.1
Earth moving Equipment

Loaders
Excavators
Graderes
More or less the equipment/macheneries listed above can represent

most of the mechanical parts. To evaluate those equipment we have set a
certain parameter relevant to the working capacity & nature of the work.
Based on the classification to meet our evaluation purpose basic parameters
are indicated on each category bellow.
Page 4
1.
Production Machineries
1.
2.
3.
4.
Machine Speed/ Second.

Rate of Product /hour Rated power
Other Utilities
-
per day.
In KW
Water
Gas -High & low pressure.
The following datas that be directly taken from the name plate or machinery
documents:
1.
2.
3.
4.
Year of manufacturing
Maker's Name & address.
Type / Model
Detail Parts & Systems.
The following physical condition be seen & taken into account for
evaluation:1.
2.
3.
4.
5.
6.
7.
Frames / Supports.
Covers
Drive System
Automatic /full, semi, or manual
Size - L x W x H
Weight
Surface finish
The following internal Conditions be taken into consideration during

evaluation
-
Drive System
Pneumatic System
Hydraulic System
Lubrication System
Page 5
For further analyses the factor stated above will be adapted in the form of
charts.
Before going to the detail inspection of parts for evaluation the under listed
factors will mainly be taken into account.
-
Industry background & current condition

Market share.
Cost Summary
Based on the manufacturer's (Supplier's) document & reliable sales invoices.

-
Depreciation Cost
External Market Condition
Technological Obsolesce
Cost summary shall be done by identifying the major machine elements

(parts) & given to them more percentage share so as to draw the aggregate
value by analogy.
For example in costing an automobile the engine may have the largest share
in comparison to the other parts and is given the lion share. Hence, a cost
summary as depicted below is allocated for the different parts of an
automobile.
-
Engine
Transmission
Chassis
Others
30 - 40 %
15 - 20 %
20 - 25 %
10 - 15 %
In a similar manner machineries could also be evaluated depending on the

type of work they perform & the product they handle.
-
Drive systems & type

Working surface & parts
Frames & supports
Others.
Page 6
The listed major units stated above are arranged in the form of table in
detail.
Description of Machinery
Physical Condition
Technical data
Cost summary in relation to parts
Page 7
Guide Line For Mechanical Equipment To Be Held As A Collateral

Documents that should be brought to the creditor branch by the
customer should fulfill the following precondition.
1.
Ownership booklet/certificate for the equipment, machinery,

vehicle as registered and also referring the specifications for
the supplier company or manufacturer.
2.
Work permit on the particular equipment, machinery and other

from an- authorized Trade & Industry or Investment Bureau.
3.
Custom declaration document signed & sealed by the

respective office authority & it should be identical with
equipment specification.
4.
CIF document should be attached (invoice of insurance &

freight). (As applicable)
5.
Maker (Manufacturer) Name , Address, Year of Manufacturing,

local agent be specified.
6.
Insurance agreement should be attached to the document.
7.
Supportive documents assembly drawings showing the internal

& external features of the equipment are necessary for
evaluation and should be presented. (as applicable).
8.
If the firm is a factory & new project or expansion then

installation or layout drawing, project approval from the
concerned or investment office is mandatory.
Page 8
Information to be attached for Estimation of Mechanical

Equipment
1.
Ownership Certificate
2.
Seller Company Address

Invoice
Year of Manufacturing
3.
Work permit on the particular Machine/ Industry.
4.
Land holding Certificate ( Where the Machinery is installed)
5.
If Rented
Private
6.
Government
Other related Factors

________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
N
O
Page 9
FACTORS CONSIDERED DURING EVALUATION

P Due to a number of reasons Equipment, machinery and vehicles
affected their working condition, capacity & lifetime. Among
these are:
- Road condition
- Climate or weathering
- Lack of personal skill
- Working condition
The above points cause failure to the equipment, machinery & vehicle
before the designed lifetime in operation.
Therefore, to be safe during valuation for collateral the
equipment machinery or vehicle service year should be
considered starting from the date of manufacturing/starting
operation as applicable as follows:
- For house hold purpose & office use vehicles
7 years.
- Station Wagon, pickup (Single & Double Cabin) Minibuses
8 - 10 Years
- Trucks & Forklifts
-12 - 15 Years
- Machineries -15 Years for factories having small market share
& capacity
20 Years for factories having large market share
& capacity
- Earth moving equipment
- 15 years
The following rates are applied during valuation.
Market condition of manufacturer (Mm)

Table -1
Equipment /Vehicle or machinery condition (Ec) Table -2
Depreciation rate for machinery (Dr)

Table -3
Depreciation rate of Vehicle(Dr)

Table -4
Model preference rate for vehicle

Table -5
General Formula
Tc= RC X DR X Mm X Ec
TC= Total Equipment /Machinery or Vehicle cost (Estimated)
RC= Replacement Cost
DR= Depreciation Rate
Mm= Maker Market Share
EC= Equipment, Machinery or vehicle Condition
Reference: For age base depreciation value it is adapted from the
disposal manual dated March 17, 1997 prepared by
Federal Democratic Republic Of Ethiopia Office Of The
Prime Minister.
Page 10
Table 1
Market Condition of Manufacturer (Maker)(Mm)
1.
2.
3.
4.
5.
6.
Maker Country/Factory
West Europe
America
Japan
Russia
Eastern Europe
Others
Rate
1.0
1.0
1.0
0.8
0.8
0.8
Table 2
No
1
2
Equipment Machinery or Vehicle Condition (EC)

Prevailing
Allocated Points
Remark
Condition
Range
The equipment is functional
(operational) but needs servicing
Equipment is not operational during
survey but, major components &
systems are available it requires
medium repair
Units & minor replaceable parts are not
available in the equipment body dating
survey.
Major Components & parts are not
available on the equipment & it needs
total replacement or overhaul
maintenance. (for the missing part(s)
inquisition)
0.7 - 0.9
0.5 - 0.7
0.3 - 0.49
0.1 - 0.29
Servicing Cleaning
lubricating & setting
Medium repairs servicing
+ parts replacing (fast
wearing & spaces)
Units are machine parts
less valuable than the
major components like
drive system (engine)
Page 11
Table 3
Depreciation Rate for Machinery (Dr)

No
Service Year
Rate
Remark
1 year
If preventive maintenance is applied

properly.
2 years
0.98
''
3 years
0.96
Ditto
4 years
0.94
''
5 years
0.90
6 years
0.86
7 years
0.82
8 years
0.77
9 years
0.72
10
10 years
0.67
11
11 years
0.62
12
12 years
0.57
13
13 years
0.51
14
14 years
0.45
15
15 years
0.39
16
16 years
0.33
17
17 years
0.33
18
18 years
0.27
19
19 years
0.21
20
20 years
0.13
Page 12
Table 4
Vehicle
Depreciation Value for any vehicle
No
Age in terms of years
Depreciation rate
1 year
.9
2 years
.8
3 years
.7
4 years
.633
5 years
.567
6 years
.500
7 years
.475
8 years
.45
9 years
.425
10
10 years
.400
11
11 years
.380
12
12 years
.360
13
13 years
.340
14
14 years
.320
15
15 years
.300
Remark
Page 13
Table 5
Model preference rate for Vehicle
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
Automobiles, Station Wagon, Miniguses, Pick-ups

Mercedes
1.25
Toyota
1.15
Nissan
1.05 for Automobile 0.95
Isuzu
0.95
Mitsubishi
0.95
Mazda
0.95
Honda
0.95
Suzuki
0.95
Peugeot
0.95
Renault
0.95
Volkswagen
0.95
Audi
0.95
BMW
0.95
Opel
0.95
Fiat
0.95
Land Rover
0.95
Ford
0.8
Lada
0.8
Niva
0.8
Loading Truck (Auto Bus)

2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9`
2.10
Mercedes
Fiat Iveco
Volvo
Scaniya
DAF
Nissan
Isuzu
Mitsubishi
Kamaz
Hino
1.20
1.20
1.10
1.10
1.10
1.10
1.00
0.95
0.8
0.95
Page 14
A Model Which illustrate the method of Equipment Estimation

A production machine of which is manufactured in Italy in 1995 supplied to
Mr. X's factory for an amount of 1,500,000 Birr the customer duty was 8% of the
equipment price CIF 35,000 Birr and Mr. X has spend 30,000 Birr for making
ready the machinery ( for Commissioning and testing). This machine is claimed to
be held as a collateral so what would be the estimated cost.
Data
Birr
Birr
Birr
Birr
Year of Manufacturing 1995

Cost of Machinery
Custom Duty
120,000
CIF
35,000
Make Ready Cost
30,000
1,500,000
Estimated Date - 23/10/2002

Tc = Total Estimated Cost
Rc = Replacement Cost
Dr = Depreciation Rate
Mm = Market Share of Maker
Country/factory
EC = Equipment condition after physical

assessment is carried out.
* Inflation during estimation will be considered.
Rc =
Dr =
Mm =
Ec =
Tc =
1,685,000 Birr (Consists of all expenditures)

0.82
1
0.8
Rc X Dr c Mm X Ec
1,685,000 X 0.82 X 1 X 0.8 =1,105,360 Birr
Taken from the table

prepared for disposal
manual by Prime
Minster Office.
Page 15
Mechanical Equipment Estimation Form (General)

1.
2.
Applicant's Name_____________________________________
Address
Town________________ Woreda____________
Kebele_______________ House No___________
P.O.Box______________ Tel No. ____________
3.
4.
5.
6.
Property of__________________________________________
Ownership certificate & Number_________________________
Name of the Equipment________________________________
Year of Manufacturing_________________________________
a) Serial No.________________________
b) Model ___________________________
c) Plate No._________________________
d) Chassis No._______________________
e) Engine No.________________________
7.
Manufacturer Name & Address____________________________

_____________________________________________________
Location of the equipment_________________________________
______________________________________________________
Work permit on the particular equipment _____________________
_______________________________________________________
Insurance certificate on the equipment________________________
_______________________________________________________
Current tax Invoice of the equipment_________________________
_______________________________________________________
Proven performance/Guaranteed service time/__________________
Technological obsolesce
Due to part unavailability
Productivity Rate
Others
Remark on obsolescence___________________________________
_______________________________________________________
Surveyor Remark_________________________________________
_______________________________________________________
_______________________________________________________
8.
9.
10.
11.
12.
13.
14.
15.
Page 16
_______________________________________________________
N.B. Detail cost summary will be attached with this General format.
Physical Assessment____________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Installment Condition____________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Technical Assessment ___________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Machine Availability /Workability ________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Inspected by
_________________
Date
Signature
______________
_________________
Page 17
Page 18
COST SUMMARY ANALYSIS

No
Description Of
Machinery
Specification
Qty
Service Year
Designed
Service For
Invoice
Value
Deprecation
Rate Value
Net
Estimated
Value
Remark
Page 19
Page 20
Applicant __________________________________________
_____________________________Branch
COST SUMMARY
Rc
Replacement Cost _______________________________

______________________________________________
Dr
Depreciation Rate_______________________________
______________________________________________
Mm =
Manufacturer Market Share________________________

______________________________________________
Ec
Equipment Condition_____________________________
______________________________________________
Tc
Total Estimated Value ___________________________

______________________________________________
Estimated by ___________________________
Date ___________________
Signature_________________
Page 21
Data Collocation Format for Production Machineries

Description of Machinery
Name________________________________________________________
Model________________________________________________________
Serial No _____________________________________________________
Year of manufacturing __________________________________________
Maker Address ________________________________________________
Book Value ___________________________________________________
Size (Floor Space) _____________________________________________
Material Handling System________________________________________
Product type __________________________________________________
By Product Condition __________________________________________
Size of the Product
Ranging from ______to ____________________________________
Location of the industry__________________________________________
Wear housing Condition_________________________________________
Other Related datas _____________________________________________
Remark on Survey _____________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Page 22
_______________________________________________________________________
_
No
1
Parts
To be Inspected
Body & Cover
Frame /Support
Paint
Other
Indented/
deformed
Loose
Teared
Total %
defects
Remark
Installment
Condition
6
Working Area
Condition
General
Status
of
Physical Condition
No
1
2
Data
Product
Rate/hr
Rated power
Vibration
Working
Temperature
Utility used
Technical Data
Designed Actual
Deviation
Percentage of Loss
Grand Total of Loss

General Remark on technical survey.
_____________________________________________________________
_____________________________________________________________
Page 23
Drive System Analysis

No
Drive
System
Gear
with shafts
Belt
Chain
Friction
drives
(rolling &
contacting surfaces)
Other
Remark on Condition
of the System
% Defect of the
unit
Analysis of the total condition

Total %
*
In each case the shaft & other machine element attached to it, will be
considered as one unit.
Total % of the defect
Original Value of the System
Estimated Value
____________________
____________________
____________________
Page 24
After going through detail parts evaluation with respect to relevant

specification & technique, for final cost analysis the brake down will be
summarized in the form of units which actually leads to the total estimated
value. To facilitate the cost summary, a certain factor (Percentage share)
will be allotted for the units. The shared value is dependent on the parts
contribution in relation to the size & nature of the work it could accomplish,
comparing with the whole machine.
Even if the machineries vary one from the other due to the system or
auxiliary units they incorporate & innovation through technological
advancement, the work they accomplish & the aim for which they have been
designed is basically the same. So for certain variation which they
inclusively hold they will be treated separately & inturn the access they
have will enhance the price appreciably.
Following the above points the breakdown will be listed below.
No
Description
of unit
Proportion/Share
from the total
Value
Drive Unit
.3 - 30%
Body Supports Frames
.25 - 25%
Working Surface & Size
.20 - 20%
Cover
.1 - 10%
Others
.15 - 15%
Part
Estimated
Value
Remark
Total Estimated Value

Estimated by ____________________
Date
Signature__________________
____________________
Page 25
Summary of Cost Estimation of

Work shop Machineries & their Data Collection Format
In relation to the need of the organization, workshop Machineries are applicable for
repairing, Manufacturing & Modification works.
Basically the type of work they perform within the same category has got close
resemblance, even if they largely differ with the part, accessories & systems they held.
(Lathe, Milling sharper, Jigboring, Gear Cutting Grinding, Sharpening etc.)
For evaluating workshop macheneries, a better approach would be making certain break
down among units & allocating values in proportion to the total value of the machine,
with respect to the percentage share.
This cost summary will be a threshold for estimation manual & it is subdivided into four
major parts.
12341.1
Over all data collection format

Physical condition assessment
Technical data
Estimation
Data collection format: this part contains all the machinery history from the date
of manufacturing to the current condition and it is illustrated as follows.
Page 26
Data Collection Format

Name_______________________________________________________________.
Model______________________________________________________________.
Serial No____________________________________________________________.
Year of Manufacturing_________________________________________________
Maker Address ________________________________________________________
Installment Date/Year __________________________________________________
Book Value __________________________________________________________
Service Year _________________________________________________________
Size (Floor Space) _____________________________________________________
Product type & Size it can hold_____________________________________________
Location of the industry __________________________________________________
Owner Ship certificate ___________________________________________________
N.B.
*
On the part of the technical data the specification of each type of machine will
be attached here with the general format.
Remark on Survey________________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
Page 27
Data Collected by
_________________
Date
Signature
________________
_________________
Physical Condition Assessment

No
Description
Body Cover
Frame
Bed
Paint
Other Parts
Indented/
Scratched
Cracked
Teared
Deformed
% Defect
Grand
Total %
Remark On physical Condition Assessment

_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
Page 28
DRIVE SYSTEM
No
Description
Gear
Belt
Chain
Other
Noise
Vibration
Degree at
damage in %
Slippage
Remark
Grand Total%
Remark on derive System__________________________________________________

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Lubrication & Cooling System
No
Description
Lubrication System
Leaky
Blocked
Inadequate
Flow
Pump
Valve
Lines
Reservoirs
%
Defect
Remark
Page 29
Cooling System Pump

Line
* Lubricant & Coolant Condition
Remark on Lubrication & Cooling System

_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
Total % of defect ___________________________
Value in Proportion__________________________
Estimated Value for the systems._______________
Page 30
Lather Machine Technical Data

No
Description of part
Unit of
Measurement
cm /meter
Center Distance
Spindle bore
mm
Width of Bed
cm
Diameter of Face plate
Chuck diameter
Max-Section of tool
Feed rate
Chuck RPM
Thread Cutting Capacity
10
Tail Stock
Travel /Stroke
Tapper
mm
Morse
Main motor power

Coolant pump motor
Kw/Hp
Kw/Hp
11
12
Actual
Measurement
mm/cm
mm
mm2/in2
From_____mm/rev
To _______mm/rev
Rev/min
TPI
Inch
mm - mm
D.P.(in Inch
Remark
Page 31
Unit
No
Percentage
Share Of
The Unit
Drive Unit
0.35
Frames & Bed
0.25
Saddle
0.05
Appron
0.1
0.05
Systems
Lubrication &
Cooling
Physical Condition
Others
0.05
Value Of
The Unit In
Birr
Loss In
Percentage
Estimated
Value After
Evaluation
In Birr
Remark
0.15
Grand Total
Remark on Estimation _____________________________________________________

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Page 32
_______________________________________________________________________
___
Estimated by
__________________
Date
Signature
_______________
_________________
Vehicle & their data Collection Format

The continual technological advancement & innovation of different type & aesthetic
makes the number of model of a vehicle numerous. Despite the fact that the number of
vehicle will be big, they share common feature for the purpose they have been designed.
When making a cost summary analysis, it would be better to start with that commonly
shared feature. They all are internal combustion reciprocating engine & designed for
transporting of people or materials from place to place.
1.
Transportation
2.
Loading
3.
Type of Engine
So the classification will be based on

Private
Public
Dry
Liquid
Fuel
Diesel
Further classification will be based on four major groups.

1General data collection
2Physical assessment
3Technical data & systems
4Estimation
1.1
General data collection:- Contains all the information of a vehicle from the
date of manufacturing up to the current status.
Name______________________________
Page 33
Plate no ____________________________
Engine no __________________________
Chassis no __________________________
Model _____________________________
Manufacturer Address _________________
Year of Manufacturing________________
Service Year _______________________
Type of Engine
Fuel
Diesel
Technological Obsolesce _________________________

Ownership Certificate & Its Numbers________________
Current tax invoice_______________________________
Insurance Certificate/ Agreement no_________________
Used for ______________________________________
If Loading
Transportation
Dry
ton Capacity
Liquid
m3 Capacity
Number of Seats ___________________
Market Condition___________________________________________________
Other related data___________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Page 34
Surveyor Remark_________________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Data Collected by ___________________________ Date_________________________
Signature______________________
Vehicle
Body___________________________________________________________________
Paint___________________________________________________________________
Wind screen_____________________________________________________________
Window glass____________________________________________________________
Side______________________________________________________________
Rear______________________________________________________________
Lighting System __________________________________________________________
Front _____________________________________________________________
Side______________________________________________________________
Rear______________________________________________________________
Cover_____________________________________________________________
Page 35
Tyres___________________________________________________________________
Axels___________________________________________________________________
Front_____________________________________________________________
Rear _____________________________________________________________
Suspension System________________________________________________________
Coil Spring________________________________________________________
Leaf Spring________________________________________________________
Shock Absorber____________________________________________________
Air bag __________________________________________________________
Internal Condition-________________________________________________________
Ceiling____________________________________________________________
Floor _____________________________________________________________
Seats _____________________________________________________________
Bumper _________________________________________________________________
Remark on Survey_________________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Page 36
Technical Data
Engine
______________________________________
Type
_______________________________________
No of Cylinders _________________________________
Cylinder Bore ___________________________________mm
Stock Length ____________________________________mm
Horse Power ____________________________________hp
Fuel Consumption _______________________km/lit
Lubrication System
Splash
Force Feed
Both
Fuel tank & Its Capacity ________________________________

Lubrication System
Oil
Grease
_______________________________________________________________________
Page 37
_______________________________________________________________________
_
Ignition System Spark Plug
Fuel Injection
_______________________________________________________________________
_______________________________________________________________________
_
Cooling System___________________________________________________________
_______________________________________________________________________
_
Radiator Condition ________________________________________________________
Cooling Fan Condition_____________________________________________________
_______________________________________________________________________
Transmission ____________________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Brake System
Hydraulic
Air
Both
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
Proven Performance/ Guaranteed Service time __________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Page 38
_______________________________________________________________________
_
Other Related Factors______________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
Remark on Survey ________________________________________________________
_______________________________________________________________________
_
_______________________________________________________________________
_
_______________________________________________________________________
_
Estimation
This section shows cumulative value of the over all check list (Physical &
Technical Assessment) which comes to be evaluated in terms of money.
For estimating a vehicle in terms of money the methodology lies on the break
down of parts & taking into consideration of the major unit from the integrated system &
allocating values worth to the unit, which actually taken from the original price in
proportion.
Page 39
Giving back grade factors to the individual parts within the unit summing up to
100% & multiplying percentage factor by the allocated unit price, we will get the
estimated value of the unit, which in turn will be added to make up the whole vehicle
estimated price.
By so doing we have formulated a chart describing the evaluation method &
showing the break down value & its summation that makes a total estimated value of a
vehicle.
Description of
Unit
No
Allotted %
Share
Engine
.35 - 35 %
Chassis
.25 - 25 %
Transmission
.2 - 20 %
Physical condition
.15 - 15 %
Others
0.05 - 5 %
Original Price
Proportional
Value to
Original
Price
Estimated
Value
Remark
Total
Estimated Value
Remark on Estimation _____________________________________________________

_______________________________________________________________________
_______________________________________________________________________
_
Estimated by ___________________________
Date____________________
Signature____________________________
EARTH MOVING EQUIPMENT

COLLECTION
& THEIR DATA
An equipment performance information is a basic tool for estimation

purposes. This performance is measured with many variables peculiar to
individual jobs, Including
Page 40
Material Characteristic
Operator efficiency
Underfoot condition
Altitude etc...
Factors bearing directly on productivity include such things as weight to

horse power ratio, capacity, type of transmission, speeds and operating
costs. There are other less direct machine performance factors such as:
- Serviceability
- Parts availability
- Operator Convenience.....etc...
In comparing machine performance all factors should be considered. A
good knowledge of local condition , when coupled with experience would
make the best valuer of machine performance.
The approach most often used to measure machine performance is this
simple equation.
Lowest possible Hourly costs
Highest possible hourly productivity
Top machine
performance
Depending on the hourly owning & operating cost as a basis for calculating
the equipment value, which could be compatible to local conditions (price of
fuel & lubricant, shipping cost from the factory, interest rate, etc) & data on
earthmoving equipment will assist in accurate estimation.
The method suggested follows several basic principles
- No price are provided for any item which must always be obtained
locally.
- The multiplier factor provided will work equally well in any
currency expressed in decimal.
- Because of different standards of comparison, what seems a
severe application to one machine owner may appear only
average to the other. Therefore, to better describe machine
use; operating condition & applications are defined in
zones.
Page 41
- Unless otherwise specified, the word 'hour' when used in this

section means clock or operating hours not service meter
units.
GENERAL DATA - COLLECTION

1.
Name_____________________________Plate No___________
Page 42
2.
Model_________________________________
3.
Years of Manufacturing____________________
4.
Maker Name & Address____________________
5.
Engine Number___________________________
6.
Chasis Number____________________________
7.
Type_____________________________________
8.
Total Service year__________________________
9.
Ownership certificate & its no__________________________
10. Current tax Invoice___________________________________

11. Custom duty_________________________________________
12. Custom declaration number_____________________________
13. CIF________________________________________________
14. Gross Weight________________________________________
15. Operating weight_____________________________________
16.
Technological
obsolesce_______________________________
Due to - un productiveness
- Parts unavailability
- Others
17 . Work permit on the particular equipment ___________________
18. Insurance agreement on the equipment______________________
19. Surveyor Remark________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
Page 43

1.
Body & its Cover_____________________________________

___________________________________________________
2.
Frame /Support ______________________________________

___________________________________________________
3.
Dimension ___________________________
___________________________
___________________________
4.
Cabin with ROP (Rollover Protection)____________________

___________________________________________________
5.
Tire Condition______________________________________
___________________________________________________
6.
Bucket Size & attachment______________________________

___________________________________________________
___________________________________________________
7.
Hydraulic Line (Houses)_______________________________

___________________________________________________
8.
Axel Front & Rear___________________________________

___________________________________________________
9.
Blade Size & Type____________________________________

___________________________________________________
10.
Welded Part Condition________________________________

___________________________________________________
11.
Surveyor Remark_____________________________________
___________________________________________________
___________________________________________________
Page 44
TECHNICAL DATA
1. Engine___________________________________________
Type_____________________________________________
Horse power_______________________________________
Fuel Consumption
on light earth Work________________

on heavy earth work________________
Lubrication system____________________________________
Starting system_______________________________________
2.
Fuel system_______________________________________
Injection system____________________________________
3. Cooling system_____________________________________
Radiator__________________________________________
4.
Electrical system__________________________________
Alternator_________________________________________
Batteries_________________________________________
5.
Transmission______________________________________
6. Axles & Drives_____________________________________

7. Steering___________________________________________
8. Brakes____________________________________________
Surveyor Remark_____________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
Page 45
COST SUMMARY FOR EARTH MOVING EQUIMPENT

The summary consists of two major part
1. Owing Costs
2. Operational cost
Investment cost to own the equipment

Expenditures to put the equipment into use.
Owning Cost.
1. Delivered price ( including attachments) ____________________
2. Less residual value at replacement__________________________
- Gross selling price_______________________
- Make ready cost_________________________
- Inflation during ownership period___________
Net Residual Value_______________________
3. Value to be recovered through work
Cost/Hour = Value
Hours
When used equipment auction prices are used to estimate residual
value, the effect of inflation during the ownership period should be
removed to show in constant value what part of the asset must be
recovered through work.
4. Insurance =
N+1 X Del. price X Insurance rate %

2N_____________________________
Hours/Year
$ _______ Per year/hours/year
5. Interest cost =
N+1 X Del. price X Interest rate %

2N_____________________________
Hours/Year
$ _______ Per year/hours/year
6. Property tax = = N+1 X Del. price X tax rate %
2N_____________________________
Hours/Year
$ _______ Per year/hours per year = ________________
Page 46
Total Hourly owning cost = 3+4+5+6
Operating Cost
7.
Fuel
Unit price X Consumption

________ X ___________ = __________
8. Lub. oils, Filters, Grease

Unit price
a) Engine
_________
b) Transmission _________
c) Final drive
_________
d) Hydraulic
_________
e) Grease
_________
f) Filters
_________
9.
X
X
X
X
X
X
Consumption
___________
___________
___________
___________
___________
___________
Cost/hour
= _________
= _________
= _________
= _________
= _________
= _________
Total _____________
Tire replacement cost = Cost/life in hours.
10. Special wear items = cost/life

- Cutting edges ground engaging tools, bucket teeth ,
excavator stick, repairing etc.
Cost
life
cost/hr
1
_______ X _________ = _________
11. Total operating cost = 7+8+9+10
12.
Total owning & operating cost__________________
Page 47

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Page 1

Mechanical Equipment have wide range of applications, in relation to

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

For estimating equipment the methodology lies on the break down of

Earth moving equipment

generally sub divided into four parts

General Description & Basic Parameters

Machineries further be classified as

Earth moving Equipment

More or less the equipment/macheneries listed above can represent

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Machine Speed/ Second.

The following internal Conditions be taken into consideration during

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Industry background & current condition

Based on the manufacturer's (Supplier's) document & reliable sales invoices.

Cost summary shall be done by identifying the major machine elements

In a similar manner machineries could also be evaluated depending on the

Drive systems & type

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Guide Line For Mechanical Equipment To Be Held As A Collateral

Ownership booklet/certificate for the equipment, machinery,

Work permit on the particular equipment, machinery and other

Custom declaration document signed & sealed by the

CIF document should be attached (invoice of insurance &

Maker (Manufacturer) Name , Address, Year of Manufacturing,

Insurance agreement should be attached to the document.

Supportive documents assembly drawings showing the internal

If the firm is a factory & new project or expansion then

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Information to be attached for Estimation of Mechanical

Seller Company Address

Work permit on the particular Machine/ Industry.

Land holding Certificate ( Where the Machinery is installed)

Other related Factors

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

FACTORS CONSIDERED DURING EVALUATION

Market condition of manufacturer (Mm)

Equipment /Vehicle or machinery condition (Ec) Table -2

Depreciation rate for machinery (Dr)

Depreciation rate of Vehicle(Dr)

Model preference rate for vehicle

Equipment Machinery or Vehicle Condition (EC)

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Depreciation Rate for Machinery (Dr)

If preventive maintenance is applied

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Age in terms of years

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Automobiles, Station Wagon, Miniguses, Pick-ups

Loading Truck (Auto Bus)

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

A Model Which illustrate the method of Equipment Estimation

Year of Manufacturing 1995

Make Ready Cost

Estimated Date - 23/10/2002

EC = Equipment condition after physical

1,685,000 Birr (Consists of all expenditures)

Commercial Bank of Ethiopian Estimation manual for Mechanical Equipment

Taken from the table

Mechanical Equipment Estimation Form (General)