Motor grader with a diesel engine of 180 HP has an initial cost of 594,000. Its estimated
Question:
Motor grader with a diesel engine of 180 HP has an initial cost of 594,000. Its estimated useful life is 6 years and it is anticipated that it will be used an average of 2,000 hours per year. The crankcase of the engine has a capacity of 3.8 gallons and the site conditions necessitate oil changes every 120 hours. The unit price of diesel fuel and lubricating oil are $1.60 per gallon, and $27.00 per gallon respectively. Take the operating factor as 60%.
1. Calculate the hourly cost of owning and operating this motor grader.
a) Use the standard approach
b) Use the PSSS approach. Assume maintenance and repair cost is 100% of depreciation. Take MARR = 8%. The tax rate of the company is 42% and the equipment is considered be in the 7-year MACRS class. No major repairs are anticipated. Your capital recovery factor for (A/P, 8%, 6 yrs) = 0.2163.
c) Which approach is more conservative?
Principles Of Direct Database And Digital Marketing
ISBN: 9780273756507
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