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Arthmovers, Inc., purchases a grader to maintain haul roads. The purchase price delivered is $216,000. Tires for this machine cost $26,000. The company believes it
Arthmovers, Inc., purchases a grader to maintain haul roads. The purchase price delivered is $216,000. Tires for this machine cost $26,000. The company believes it can sell the grader after 6 years (15,000 hr) of service for $35,000. There will be no major overhauls. The company's cost of capital is 7.21 %, and its tax rate is 42%. There are no property taxes, hut insurance and storage will run 2%. What is the owning cost for the grader? Use the time value method to calculate the depreciation portion of the ownership cost
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