2. (12pts) The purchase price of a Cat 963 Track loader is $191,000 The salvage value is $20,000 and it has a 10 year useful life. a. Use the declining-balance depreciation method to estimate the book value for each of the 10 years. b. Determine yearly investment cost for each year by averaging the beginning and ending book values for the year and multiplying them by an estimated 7% interest for borrowing the money to buy the equipment and 3 % for insurance, taxes, and storage. c. The operating costs and hours worked are found below. Determine the hourly operating cost by year Operating Hours and Costs EoYe 2000 2200 ree 2a000 Com e a se ss wPau Cmene C d. Create a plot of the ownership costs per cumulative hours worked, operating costs per cumulative hours worked, and total costs per cumulative hours worked. e. Discuss your graph and what you think it is telling you. 2. (12pts) The purchase price of a Cat 963 Track loader is $191,000 The salvage value is $20,000 and it has a 10 year useful life. a. Use the declining-balance depreciation method to estimate the book value for each of the 10 years. b. Determine yearly investment cost for each year by averaging the beginning and ending book values for the year and multiplying them by an estimated 7% interest for borrowing the money to buy the equipment and 3 % for insurance, taxes, and storage. c. The operating costs and hours worked are found below. Determine the hourly operating cost by year Operating Hours and Costs EoYe 2000 2200 ree 2a000 Com e a se ss wPau Cmene C d. Create a plot of the ownership costs per cumulative hours worked, operating costs per cumulative hours worked, and total costs per cumulative hours worked. e. Discuss your graph and what you think it is telling you