What is the annual cost of owning the excavator

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Reference no: EM131991142

Gifted heart construction company obtained a loan from bay area bank at an interest rate of 10% to purchase an excavator for $550,000. The tires will be replaced at a cost of $80,000 and the engine would be refurbished at a cost of $50,000 in year 5. The salvage value of the excavator after 10 years of use in construction projects would be $75,000.

a) What is the annual cost of owning the excavator?

b) What is the future cost 6 years from now?

Reference no: EM131991142

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