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A track dozer cost $100,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $17.50 per operating hour. A major engine repair

A track dozer cost $100,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $17.50 per operating hour. A major engine repair costing $13,000 will probably be required after 5,000 hr of use. The expected resale price (salvage value) is 15% of the original purchase price. The machine is expected to have a useful life of 10,000 hr. How much should the owner of the machine charge per hour of use, if it is expected that the machine will operate 2,500 hr per year? The company's cost-of-capital rate is 8%.

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