a. A track dozer cost $195,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $45.00 per operating hour. A major engine repair cost $30,000 will probably be required after 7,500 hr of use. The expected resale price (salvage vale) is 25% of the original purchase price. The machine is expected to have a useful life of 12,000 hr. Hoe much should the owner of the machine charge per hour of use, if the machine is expected to operate 1500 hr. per year? The company's cost-of-capital rate is 7.5%. (I have provided an extra blank sheet for your solutions)

a. A track dozer cost $195,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $45.00 per operating hour. A major engine repair cost $30,000 will probably be required after 7,500 hr of use. The expected resale price (salvage vale) is 25% of the original purchase price. The machine is expected to have a useful life of 12,000 hr. Hoe much should the owner of the machine charge per hour of use, if the machine is expected to operate 1500 hr. per year? The company's cost-of-capital rate is 7.5%. (I have provided an extra blank sheet for your solutions)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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