A contractor has purchased a wheel loader for $115,000 and plans to use it 2,000 hours per year. The cost of one set of tires is $25,000. At this usage rate, the contractor anticipates disposing of the loader after using it for 10 years and realizing a salvage value of $35,000. The flywheel horsepower rating of the loaders diesel engine is 105 horsepower. The interest rate is 10%. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon.

How much is the hourly oil and grease cost if the equipment operating factor (combined factor) is 0.5, the crankcase capacity is 15 gallons, the flywheel horsepower rating of the loader's diesel engine is 105 fwhp, the time between oil changes is 250 hours, the cost of lube oil is $3.0/gal, and the cost of other oils and grease is $0.5/hr.