Calculate the expected hourly pwning and operating cost for thefourth year of the operation of the twin engine scraper with thefollowing information. Use the sum of the year's digits method ofdepreciation.Delivered priceTire cost$420,000$48,0005 years$57,000%8 of amount to be depreciated%13 of book value (end of period)Estimated lifeSalvage valueInvestment cost for the fourth yearTax, insurance and storage for fourthyearOperating conditionsRated powerFuel priceOperator's wagesHours operatedEquipment remains idle for 16 days during the year; 1 year=52 weeks=365 daysCost of special itemsSevere580 hp$5.18/gallon$28.00/hour5 days a week and 11 hours per day$24.02/hour

Depreciation means a strategy used to apportion the expense of a substantial or actual resource over…

$48,000 5 years $57,000 %8 of amount to be deprecia %13 of book value (end of pe: he fourth year torage for fourth Severe 580 hp $5.18/gallon $28.00/hour 5 days a week and 11 hours idle for 16 days during the year; 1 year352 weeks=3 $24 02 /hour

$48,000 5 years $57,000 %8 of amount to be deprecia %13 of book value (end of pe: he fourth year torage for fourth Severe 580 hp $5.18/gallon $28.00/hour 5 days a week and 11 hours idle for 16 days during the year; 1 year352 weeks=3 $24 02 /hour

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Calculate the expected hourly pwning and operating cost for the
fourth year of the operation of the twin engine scraper with the
following information. Use the sum of the year's digits method of
depreciation.
Delivered price
Tire cost
$420,000
$48,000
5 years
$57,000
%8 of amount to be depreciated
%13 of book value (end of period)
Estimated life
Salvage value
Investment cost for the fourth year
Tax, insurance and storage for fourth
year
Operating conditions
Rated power
Fuel price
Operator's wages
Hours operated
Equipment remains idle for 16 days during the year; 1 year=52 weeks=365 days
Cost of special items
Severe
580 hp
$5.18/gallon
$28.00/hour
5 days a week and 11 hours per day
$24.02/hour

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