A contractor has purchased a small backhoe for $120,000 that he plans to use in excavating ditches for utilities construction. He plans to use the backhoe for 8 years and sell the used machine for $40,000. He must replace the tires on the backhoe after each 3,000 hours of use at a cost of $15,000. Annual operating and labor costs are estimated to be $20,000 per year. The contractor estimates that the backhoe will be used about 1,000 hours per year. If the minimum attractive rate of return is 12%; what is the hourly owning and operating cost for the backhoe? Please required urgent... Thank you
A contractor has purchased a small backhoe for $120,000 that he plans to use in excavating ditches for utilities construction. He plans to use the backhoe for 8 years and sell the used machine for $40,000. He must replace the tires on the backhoe after each 3,000 hours of use at a cost of $15,000. Annual operating and labor costs are estimated to be $20,000 per year. The contractor estimates that the backhoe will be used about 1,000 hours per year. If the minimum attractive rate of return is 12%; what is the hourly owning and operating cost for the backhoe? Please required urgent... Thank you
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A contractor has purchased a small backhoe for $120,000 that he plans to use in excavating ditches for utilities construction. He plans to use the backhoe for 8 years and sell the used machine for $40,000. He must replace the tires on the backhoe after each 3,000 hours of use at a cost of $15,000. Annual operating and labor costs are estimated to be $20,000 per year. The contractor estimates that the backhoe will be used about 1,000 hours per year. If the minimum attractive
Please required urgent... Thank you
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