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 loader's diesel engine is 105 horsepower. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon. The interest rate is 10%. How much is the hourly equipment repair cost if annual cost of repairs equals 70% of straight line depreciation? Select one: a. $1.93/hr b. $4.00/hr c. $3.50/hr d. $2.75/hr