Chapter 22 Problem 1

PROBLEMS 1. The purchase price of a loader including the tires, sales tax, and all other costs associated with its purchase is $210,000. The life of the loader is 9 years, at which time it will have an estimated salvage value of $23,000. The replacement cost of the tires is $11,000 for all tires on $0.44/hr of operation, including the labor to install them. The estimated repair reserve is $14.40/hr. Using 1,500 billable hours per year, determine the hourly own- ership and operation cost of the loader. 2 TI