Question

ANS Question 5: Calculate the ownership cost per hour for an excavator powered by a 250-hp engine tef based on the following data: Purchase price (P) $420,000 Salvage value (F) -$250,000 Operation factor 50% Useful life (N)-6 years Working hours per year 2000 Maintenance and repair costs: 1 10% of annual depreciation Diesel fuel price 3.8/galion Fuel consumption = 0.04 gallon/hp/hr Lube oil coste 10% of fuel Interest rate (»-10% ANS.

Answer 1

# Annual Depreciation (AD) = P - F/N = 420,000 - 250,000/6 = $28,333.33/year # and Repair Cost (M/R) = 110/100 times 28,333.33 = $3,116.67/year #Financing Express(FE) = P + F/2 times i = $33,500/year Total Ownership Cost = (AD + M/R + FE) yr^-1 = 28,333.33 + 3,116.67 + 33,500 = $ 64,950 year^-1 = 64,950/2000 hour^-1 = $ 32.475 hour^-1