Need #2

1. The Purchase price of an excavator is $185,950 excluding sales tax and deliver. Delivery is $3,500 and sales tax is 6.5% of the purchase price (excluding delivery). The expected useful life of the excavator is 8 years. At the end of its useful life, the excavator is expect to have a salvage value of $19,000. it is expected that the excavator will be used 1,350 hours per year. Using an interest rate of 8.25% determine the hourly depreciation and interest cost for the excavator.

2. For the excavator in problem 1, the owner decides to incorporate the taxes and license, insurance, and storage costs into the rate by adding 1.25% for taxes and license, 1.75% for insurance, and 1.1% for storage. Determine the ownership cost for the excavator.