Calculate the hourly operating cost (under average conditions) for a 180- horsepower motor grader which costs $230,000 and is used in general contracting for 1500 hours per year for 10 years. The per gallon price of diesel fuel is $2.90. Salvage value is estimated to be $85,000 and a set of tires costs $5,000 for 2000 hours of average useful life. Assume a repair factor of 40% based on 10,000 hours of useful life as a percentage of hourly straight-line depreciation. (Use discount rate of 8%).

Calculate the hourly operating cost (under average conditions) for a 180- horsepower motor grader which costs $230,000 and is used in general contracting for 1500 hours per year for 10 years. The per gallon price of diesel fuel is $2.90. Salvage value is estimated to be $85,000 and a set of tires costs $5,000 for 2000 hours of average useful life. Assume a repair factor of 40% based on 10,000 hours of useful life as a percentage of hourly straight-line depreciation. (Use discount rate of 8%).

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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