Question: 2 . 7 A machine cost $ 3 0 0 , 0 0 0 to purchase. Fuel, oil, grease, and minor maintenance are estimated to
A machine cost $ to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $ per operating hour. A set of tires cost $ to replace, and their estimated life is use hours. A $ major repair will probably be required after hours of use. The machine is expected to last for hours, after which it will be sold at a price salvage value equal to of the original purchase price. A final set of new tires will not be purchased before the sale. How much should the owner of the machine charge per hour of use, if it is expected the machine will operate hours per year? The company's costofcapital rate is
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