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2.13 Pushem Down clearing contractors purchases a dozer with a delivered price of $470,000. The company believes it can sell the used dozer after 4 years (1,800 hr/yr) of service for $75,000. There will be no major overhauls. The company's cost of capital is 8.3%, and its tax rate is 35%. Property taxes, insurance, and storage will run 5%. What is the owning cost for the dozer? Use the time value method to calculate the depreciation portion of the ownership cost. ($58.078/hr)

2.13 Pushem Down clearing contractors purchases a dozer with a delivered price of $470,000. The company believes it can sell the used dozer after 4 years (1,800 hr/yr) of service for $75,000. There will be no major overhauls. The company's cost of capital is 8.3%, and its tax rate is 35%. Property taxes, insurance, and storage will run 5%. What is the owning cost for the dozer? Use the time value method to calculate the depreciation portion of the ownership cost. ($58.078/hr)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2.13 Pushem Down clearing contractors purchases a dozer with a delivered price of $470,000. The company believes it can sell the used dozer after 4 years (1,800 hr/yr) of service for $75,000. There will be no major overhauls. The company's cost of capital is 8.3%, and its tax rate is 35%. Property taxes, insurance, and storage will run 5%. What is the owning cost for the dozer? Use the time value method to calculate the depreciation portion of the ownership cost. ($58.078/hr)
Transcribed Image Text:2.13 Pushem Down clearing contractors purchases a dozer with a delivered price of $470,000. The company believes it can sell the used dozer after 4 years (1,800 hr/yr) of service for $75,000. There will be no major overhauls. The company's cost of capital is 8.3%, and its tax rate is 35%. Property taxes, insurance, and storage will run 5%. What is the owning cost for the dozer? Use the time value method to calculate the depreciation portion of the ownership cost. ($58.078/hr)
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