Question: A track dozer cost $ 1 9 5 , 0 0 0 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $

A track dozer cost $195,000to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $45.00 per operating hour. A major engine repair cost $30,000 will probably be required after 7,500 hr of use. The expected resale price (salvage vale) is 25% of the original purchase price. The machine is expected to have a useful life of 12,000 hr. How much should the owner of the machine charge per hour of use, if the machine is expected to operate 1500 hr. per year? The companys cost-of-capital rate is 7.5%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Civil Engineering Questions!