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What is the cost per hour of owning the loader

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You have been asked to give an economical assessment based on ownership cost and operating cost ($/hr) of a loader with the purchase price of $150000. Using straight line depreciation method, the machine is expected to be used for 4 years and is expected to be sold for $20000 at the end of the 4th year.

A set of tires for this loader, which should give 1800 hrs of service, cost $20000. The annual cost of repairs equals 60% of the straight-line machine depreciation. Tire repair is 14% of tire depreciation. The loader is expected to work 900 hr/yr. The oil consumption of the loader is 0.237gal/hr and fuel consumption of the loader is 7.215gal/hr; oil is $3.00/gal and fuel cost $1.15/gal. The cost of other lubricants and filters is $0.65/hr. The annual interest rate is 5%.

a) What is the cost per hour of owning the loader?

$Answer

/hr (keep 2 decimal places)

b) What is the hourly repair cost of the loader?

$Answer

/hr (keep 2 decimal places)

c) What is the hourly cost of the tires?

$Answer

/hr (keep 2 decimal places)

d) What is the total hourly cost of operating this loader?

$Answer

/hr (keep 2 decimal places)

Reference no: EM133205426

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