A contractor has purchased a wheel loader for $$115,000$ and plans to use it $2,000$ hours per year. The cost of one set of tires is $$25,000.$ At this usage rate, the contractor anticipates disposing of the loader after using it for $10$ years and realizing a salvage value of $$35,000.$ The flywheel horsepower rating of the loader's diesel engine is $105$ horsepower. The interest rate is $10\%.$ The loader operator will earn $$34\mathrm{.}00$ per hour including fringe benefits, and diesel fuel costs $$1\mathrm{.}20$ per gallon.

How much is the contractor's hourly depreciation portion of ownership cost for the loader if using the Time Value Method $($see textbook page $42$ Example $2\mathrm{.}8$ for reference$)?$

Select one:

a$.$ $$\frac{9\mathrm{.}37}{h}r$

b$.$ $$\frac{6\mathrm{.}23}{h}r$

$$\frac{7\mathrm{.}43}{h}r$

d$.$ $$\frac{8\mathrm{.}27}{h}r$

Your answer is correct.

The correct answer is: $$\frac{6\mathrm{.}23}{h}r$