• A 400-fwhp diesel-powered track dozer will be used to support a scraper fleet. This dozer was purchased for $395,000. The estimated salvage value at the end of 4 yr is $105,000. The company's cost-of-capital is 7.6%.
• The dozer will work 1,800 hr/yr. The work efficiency will be equal to a 50-min hour. The engine will work at full throttle while push loading the scrapers (60% of the time) and a three-quarter throttle to travel and position.
• The annual cost of repairs equals 68% of the straight-line machine depreciation.
• Fuel consumption for diesel engine is 0.04 gal per fwhp-hr. Fuel cost is $3.00/gal.
• Oil consumption is 0.006 lb/hp-hr. The crankcase capacity is 16 gal, and the company has a policy to change oil every 150 hours. Oil cost is $3.50/gal. The cost of other lubricants and filters is $0.65/hr.
• In this usage, the estimated life for cutting edges is 410 hours. The local price for a set of cutting edges is $1,300.

Q1. What is the ownership expense per hour using the Time Value method?

Q2. What is the cost of equipment repair per hr of use?

Q3. What is the cost of fuel per hr of use?

Q4. What is the cost of oil and filters per hr of use?

Q5. What is the cost of cutting edges per hr of use?

Answer rating: 100% (QA)

To calculate the ownership expense per hour using the Time Value method well use the Present Worth PW method Here are the steps 1 Calculate the annual ... View the full answer