Engineering economics

A contractor has decided to add a grader to his equipment fleet. He could purchase either a new or a used one. Interest, insurance, and taxes total about 12%, and the contractor anticipates using the grader about 2,000 hours per year. which of the following alternatives should the contractor select? b) The used grader costs $75,000 to purchase and is expected to have a useful life of 8,000 hours of operation. Tires cost $5,000 to replace (estimated to occur after every $4,000 hours of use). Fuel, oil, and minor maintenance cost about $18.25 for each hour the grader is used. Estimated salvage value at the end of 8,000 hours of use is $8,000. A contractor has decided to add a grader to his equipment fleet. He could purchase either a new or a used one. Interest, insurance, and taxes total about 12%, and the contractor anticipates using the grader about 2,000 hours per year. which of the following alternatives should the contractor select? b) The used grader costs $75,000 to purchase and is expected to have a useful life of 8,000 hours of operation. Tires cost $5,000 to replace (estimated to occur after every $4,000 hours of use). Fuel, oil, and minor maintenance cost about $18.25 for each hour the grader is used. Estimated salvage value at the end of 8,000 hours of use is $8,000