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A construction firm is evaluating the comprehensive hourly operating costs for one of its heavy machinery units, specifically focusing on the tire - related expenses.

A construction firm is evaluating the comprehensive hourly operating costs for one of
its heavy machinery units, specifically focusing on the tire-related expenses. The machine
operates with a set of four tires, each set being expected to endure an operational lifespan
of 3,500 hours before necessitating replacement. The procurement cost for each set is
$45,000. Over the course of their usage, repair and maintenance expenditures are
projected to average 20% of the tires' straight-line depreciation value.
The machine is scheduled to operate for 2,800 hours annually throughout its expected
useful life of 6 years. In determining the financial outlay for these tire-related costs, it is
crucial to consider the firm's cost of capital, which is set at 8%, and to factor this into the
calculation of the equivalent annual cost associated with tire depreciation and repair.
Given these conditions, calculate the hourly tire cost that should be integrated into the
machines operating expenses.

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