A diesel-powered wheel loader will be used to load shot rock. The loader was purchased for $250,000. The estimated salvage value at the end of
A diesel-powered wheel loader will be used to load shot rock. The loader was purchased for $250,000. The estimated salvage value at the end of 4 years is $86,000. The companys cost of capital is 7.2% A set of tires costs $36,000. The loader will work 1,600 hr/yr.
- Calculate the total of depreciation portion of ownership and operational cost using the discounted time value method.
- Calculate the total of depreciation portion of ownership and operational cost using the Average Annual Investment (AAI) method.
Assume:
| Fuel | $21.266 | per hr |
| Lubricants | $2.000 | per hr |
| Repair | $23.156 | per hr |
| Tires | $14.385 | per hr |
| High wear | $1.925 | per hr |
| Total operating cost = | $62.732 | per hr |
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Authors: Anne Britton, Chris Waterston
4th Edition
0273703609, 978-0273703600
