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Elements and Performance Criteria

1. Calculate costs associated with machinery and use to assist decision making
   • Overhead, operating and intangible costs related to machinery are calculated.
   • Relevant benchmark data that relates machinery costs to enterprise productivity is sourced and compared to own enterprise data.
   • Comparison of productivity and suitability of different types and brands of machinery is made.
2. Review machinery requirements
   • Machinery inventory is reviewed in the context of the goals of the business, and current and future productivity and profitability levels.
   • Alternatives to ownership are identified, costed and evaluated.
   • Tax impact of the capital investment is identified through appropriate professional support and incorporated into the analysis.
   • Risks associated with high capital investment in machinery are assessed and controlled in making machinery decisions.
3. Analyse returns from major capital investments in machinery
   • Capital budgeting techniques including energy efficiency are used to calculate the rate of return on major investment decisions.
   • Plan and analysis of machinery options are reviewed and refinements are recorded.

Required Skills

Required skills

calculate costs associated with machinery review machinery inventory and requirement evaluate and cost options assess investment risk budget and incorporate benchmarks calculate returns from major capital investments in machinery document a comprehensive report use literacy skills to fulfil job roles as required by the organisation The level of skill may range from reading and understanding documentation to completion of written reports use oral communication skillslanguage competence to fulfil the job role as specified by the organisation including questioning active listening asking for clarification negotiating solutions and responding to a range of views use numeracy skills to estimate calculate and record complex workplace measures use interpersonal skills to work with others and relate to people from a range of cultural social and religious backgrounds and with a range of physical and mental abilities

Required knowledge

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

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria required skills and knowledge range statement and the Assessment Guidelines for the Training Package
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit	The evidence required to demonstrate competency in this unit must be relevant to workplace operations and satisfy holistically all of the requirements of the performance criteria and required skills and knowledge and include achievement of the following calculate the total running cost of machinery review the machinery needs of the enterprise and evaluate costed alternative options budget the calculated rate of return on investments using benchmarks of energy efficiency 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 define the preferred option review the investment plan and analysis of options
Context of and specific resources for assessment	Competency requires the application of work practices under work conditions Selection and use of resources for some worksites may differ due to the regional or enterprise circumstances

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Range Statement

The range statement relates to the unit of competency as a whole.
The factors may include:	the range of farming systems financing arrangements machinery types budgeting variables, including energy efficiency machinery ownership options.

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