1. What is the total hourly owning cost? 2. What is the total operating cost? 3. What is the Machine Owning and Operating cost?
Your company is considering the purchase of a new 623K Wheel Tractor-Scraper. Use the following information to calculate the hourly owning costs, hourly operating costs, and total owning and operating costs.
- Delivered price (with tires): $420,000
- Cost of Tires: $30,000 and their life is determined by the average operation in zone B.
- Salvage value is zero - the equipment is new and it is anticipated to be used for 5 years, until end of its service life.
- Anticipated operating hours per year: 2,000 hrs/yr
- Simple interest rate for purchase loan: 12%
- Annual cost of Insurance: $5,500 (See optional method)
- Property tax rate: 2%
- Fuel use will be average value in medium range
- Cost of fuel: $3.10 per gallon
- Hourly Maintenance Cost: $5.00 per hour
- Repair cost: $11.00 per hour
- Operator cost (with fringes): $75 per hour
- No undercarriage or special wear items costs required
1. What is the total hourly owning cost?
2. What is the total operating cost?
3. What is the Machine Owning and Operating cost?
4. What is the Owning and Operating Cost?
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