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A contractor purchased a grader for $350000 and expects to use it about 1500 hours per year. The contractor plans to use the grader for
A contractor purchased a grader for $350000 and expects to use it about 1500 hours per year. The contractor plans to use the grader for 8 years and then realize a salvage value of about $75000. Tires for the grader cost $10000 for a set of 6 tires. The useful life of a set of tires is estimated at 3500 hours. The grader is powered by a 120-horsepower, diesel engine, and diesel fuel costs $4.2 per gallon. Part A: The equipment repair factor is estimated to be about 60% of the hourly straight-line depreciation for the 8 years of ownership. What do you estimate the hourly maintenance and repair cost for the grader (less tires) to be? Part B: What do you estimate the hourly tire cost to be for the grader? Part C: What do you estimate the hourly fuel cost to be for the grader? Equipment fuel factor is 0.043. Part D: What do you estimate the hourly filter, oil, and grease cost to be for the grader under unfavorable working conditions? Equipment service cost factor is 0.5. Part E: What hourly equipment rate should the contractor charge a project for use of the grader if a profit of 2% is desired from the equipment fleet and the hourly ownership cost is $52 per hour? Part A: Hourly depreciation cost Part A: Hourly repair cost Part B: Hourly tire cost Part C: Hourly fuel cost Part D: Hourly service cost Part E: Hourly equipment rental cost
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