A $262-$hp diesel$-$powered wheel loader will be used to load shot rock. This loader was purchased

for $$350,000.$ The estimated salvage value at the end of four years is $$86,000.$ The company's cost

of capital is $8\%.$ A set of tires costs $$36,000.$ The operating factor is $0\mathrm{.}62.$ The crankcase capacity

is $12$ gals and the company has a policy to change oil every $100$ hours on this job. The annual cost

of repairs equals $65\%$ of the straight$-$line machine depreciation. Fuel cost is $$\frac{3\mathrm{.}25}{g}al,$ and oil is

$$\frac{4\mathrm{.}55}{g}al.$ The cost of other lubricants and filters is $$\frac{0\mathrm{.}45}{h}r.$ Tire repair is $18\%$ of tire depreciation.

The tires should give $3,600$ hours of service. The loader will work $1,200h\frac{r}{y}r.$ In this usage, the

estimated life for bucket teeth is $120$ hr $.$ The local price for a set of teeth is $$700.$ What is the

ownership and operation cost for the loader in this application, please use both the Time value of

money method and the AAI method for ownership cost?

Hourly Fuel Cost $=$ Flywheel Horsepower $*$ Fuel Factor $*$ Fuel Unit Price

Fuel Factor of diesel type engine $=0\mathrm{.}04*$ operating factor

Fuel Factor of gasoline type engine $=0\mathrm{.}06*$ operating factor

Hourly Oil Quantity Consumed

$=\frac{\text{H}\text{o}\text{r}\text{s}\text{e}\text{p}\text{o}\text{w}\text{e}\text{r}*\text{o}\text{p}\text{e}\text{r}\text{a}\text{t}\text{i}\text{n}\text{g}\text{f}\text{a}\text{c}\text{t}\text{o}\text{r}*0\mathrm{.}006}{7\mathrm{.}4l\frac{b}{g}al}+\frac{\text{C}\text{a}\text{p}\text{a}\text{c}\text{i}\text{t}\text{y}of\text{t}\text{h}\text{e}\text{c}\text{r}\text{a}\text{n}\text{k}\text{c}\text{a}\text{s}\text{e}in\text{g}\text{a}\text{l}\text{l}\text{o}\text{n}\text{s}}{\text{n}\text{u}\text{m}\text{b}\text{e}\text{r}of\text{h}\text{o}\text{u}\text{r}\text{s}\text{b}\text{e}\text{t}\text{w}\text{e}\text{e}\text{n}\text{o}\text{i}\text{l}\text{c}\text{h}\text{a}\text{n}\text{g}\text{e}}$