A loader is being considered to tram material from a stockpile. The cost of the machine...
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A loader is being considered to tram material from a stockpile. The cost of the machine is estimated at $1,400,000 with an estimated salvage value of $425,000 at the end of year seven. Operating costs are estimated to be $320,000 annually with major repairs of $250,000 and $300,000 required at the end of years 3 and 5, respectively. Given the required tram distance, the machine can move 2,900 tons of material daily, 250 days per year. For a desire minimum rate of return of 12%, calculate the present worth cost and the equivalent annual cost of operating the machine over the next seven years. Finally, calculate the breakeven cost per ton of material being trammed. A loader is being considered to tram material from a stockpile. The cost of the machine is estimated at $1,400,000 with an estimated salvage value of $425,000 at the end of year seven. Operating costs are estimated to be $320,000 annually with major repairs of $250,000 and $300,000 required at the end of years 3 and 5, respectively. Given the required tram distance, the machine can move 2,900 tons of material daily, 250 days per year. For a desire minimum rate of return of 12%, calculate the present worth cost and the equivalent annual cost of operating the machine over the next seven years. Finally, calculate the breakeven cost per ton of material being trammed.
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Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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