Equipment rate to charge to the project

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Reference no: EM131860124

New Tractor purchase price: $140,000

Estimated useful life: 12,000 hours

Salvage value: 20% of its purchase price

Three possible scenarios:

Scenario A: Average usage of 800 hrs / yr

Scenario B: Average usage of 1000 hrs / yr

Scenario C: Average usage of 1500 hrs / yr

Estimated Operating Costs: $42.00 / hr

Desired profit: 3% of the entire ownership, operating cost

Effective Interest (MARR): 12%

Equipment rate to charge to the project for each scenario?

Reference no: EM131860124

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