Full Problem # $5$

How much is the cost per hour for a wheel loader with an initial cost of $$45,000?$ The cost of capital $($a$.$k$.$a interest rate$)$ is $7\%.$ The set of tires cost to replace is estimated at $$3,200$ and their estimated life is $2,800$ hours of use. NOTE: a final set will not be required before the sale of the loader. The salvage value of the loader after $8,400$ hours of use is expected to be $10\%$ of the initial cost. The cost of fuel and minor maintenance is estimated to be $$12\mathrm{.}34$ per operating hour. The annual operating hours of the loader are estimated at $1,400$ hours. A $$6,000$ major repair will probably be required after $4,200$ hr of use.

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