$5\mathrm{.}8$ Use Method $1($combined depreciation and investment costs for ownership costs$)$

to determine the probable cost per hour of owning and operating a rubber tire

unit of equipment with a $250-$hp diesel engine. The following conditions apply,

Factory delivered price $=$$$450,000$

Sales tax$=5\%$ of delivered price

Unloading and assembling $=$$$2,500$

Salvage value $=$$$120,000$

Useful life $=5yr$

Hours used per year $=1,500hr$

Interest on investment $=8\%$

Maintenance and repairs $=70\%$ of straight$-$line depreciation

Diesel engine $=250hp$

Operating factor $=0\mathrm{.}60$

Fuel costs $=$$$\frac{4\mathrm{.}00}{g}al$

Crankcase capacity $=8$ gal

Hours between oil changes $=120hr$

Oil costs $=$$$\frac{16}{g}al$