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Elements and Performance Criteria

1. Calculate costs associated with machinery use
   • Calculate overhead, operating and intangible costs related to machinery
   • Source and compare relevant benchmark data that relates machinery costs to enterprise productivity to own enterprise data
   • Make comparison of productivity and suitability of different types and brands of machinery
2. Review machinery requirements
   • Review machinery inventory in the context of the goals of the business and current and future productivity and profitability levels
   • Identify, cost and evaluate alternatives to ownership
   • Identify tax impact of the capital investment through appropriate professional support and incorporated into the analysis
   • Assess and control risks associated with high capital investment in machinery in making machinery decisions
3. Analyse returns from major capital investments in machinery
   • Use capital budgeting techniques including energy efficiency to calculate the rate of return on major investment decisions
   • Review machinery options plan and analysis and record changes

Range Statement

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Performance Evidence

The candidate must be assessed on their ability to integrate and apply the performance requirements of this unit in a workplace setting. Performance must be demonstrated consistently over time and in a suitable range of contexts.

The candidate must provide evidence that they can:

calculate costs associated with machinery

review machinery inventory and requirement

evaluate and cost options

assessing investment risk

budget and incorporate benchmarks

calculate returns from major capital investments in machinery

compare the productivity and suitability of different types and brands of machinery

analyse the financial costs, tax impact and investment risk for different types of machinery

document the analysis and defining the preferred option

review the investment plan and analysis of options

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Knowledge Evidence

The candidate must demonstrate knowledge of:

benchmarking practices and procedures, including energy efficiency, carbon footprint and water use efficiency

capital budgeting techniques

relevant taxation provisions relating to investment

risks associated with investments

analysis and planning processes

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