CMCET 530 - Construction Cost Management Chapters 15-17 Test Problem #4 Your company is looking at purchasing a RT30 Ton Crane at a cost of $125,000. The crane would have a useful life of seven years. At the end of the seventh year the salvage value is estimated to be $10,000. The crane could be billed out at $98.00/hour and costs $30.00/hour to operate. The operator costs $38.00/hour. Using 1,100 billable hours per 1 year, determine the NPV for the purchase of the crane using a MARR of 22%. 2 3 4 5 Purchase Price s Annual Profit 7 Salvage Value 3 Useful Life (Yrs) MARR (%) 1 Cashflow 2 3 4 5 Year 0 1 2 3 4 5 6 7 5 7 3 9 1 NPV 2 3 PV of AP = 4 PV of SV = 5 PP = $0 $0 $ NPV $0 5 7