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please help me with this question as i do not know 1. An item of equipment is to be purchased for $950,000. The anticipated operating
please help me with this question as i do not know
1. An item of equipment is to be purchased for $950,000. The anticipated operating costs, maintenance costs and salvage values for each year are detailed in the table overleaf. Determine the economic life of the equipment. It may be assumed that the cost of capital is 10%, depreciation for tax purposes of capital expenditure is allowable at 30% on a declining balance basis and the effective tax rate is 50%. Years of service 1 2 3 4 5 6 7 8 9 10 $ Operating cost for Maintenance cost Salvage value at year for year end of year 40,000 10,000 100,000 60,000 10,000 90,000 70,000 12,000 80,000 70,000 14,000 70,000 80,000 16,000 60,000 80,000 18,000 50,000 80,000 20,000 40,000 80,000 25,000 30,000 100,000 26,000 20,000 110,000 28,000 10,000 2. A truck powered by a diesel engine working at a 100% load factor is operated at a mine. If fuel consumption for this truck is 0.3 VW and the truck is rated at 1,600 kW what is the level of fuel consumption per hour and the cost of fuel per hour for the following conditions: a) Load factor low = 0.2 b) Load factor medium = 0.35 c) Load factor high = 0.6 Assume cost of diesel is $ 1.20 /. 3. A large rear dump truck working in a coal mining operation under good conditions has a current purchase price of $ 600,000, including $ 80,000 for the initial cost of six tyres. What is the net capital cost? If the repair factor is 0.25 x 10-4 and for good conditions the job factor is 0.8, determine the estimated repair cost per operating hour? If major overhaul costs are estimated at 15% of the net capital cost and this occurs every 20,000 hours determine the major overhaul cost per operating hour? If maintenance labour costs are $50/ person hour, a single maintenance person is required and the maintenance labour requirement is estimated at 0.8 person hours per operating hour determine the maintenance labour cost? Determine the total maintenance cost? 1. An item of equipment is to be purchased for $950,000. The anticipated operating costs, maintenance costs and salvage values for each year are detailed in the table overleaf. Determine the economic life of the equipment. It may be assumed that the cost of capital is 10%, depreciation for tax purposes of capital expenditure is allowable at 30% on a declining balance basis and the effective tax rate is 50%. Years of service 1 2 3 4 5 6 7 8 9 10 $ Operating cost for Maintenance cost Salvage value at year for year end of year 40,000 10,000 100,000 60,000 10,000 90,000 70,000 12,000 80,000 70,000 14,000 70,000 80,000 16,000 60,000 80,000 18,000 50,000 80,000 20,000 40,000 80,000 25,000 30,000 100,000 26,000 20,000 110,000 28,000 10,000 2. A truck powered by a diesel engine working at a 100% load factor is operated at a mine. If fuel consumption for this truck is 0.3 VW and the truck is rated at 1,600 kW what is the level of fuel consumption per hour and the cost of fuel per hour for the following conditions: a) Load factor low = 0.2 b) Load factor medium = 0.35 c) Load factor high = 0.6 Assume cost of diesel is $ 1.20 /. 3. A large rear dump truck working in a coal mining operation under good conditions has a current purchase price of $ 600,000, including $ 80,000 for the initial cost of six tyres. What is the net capital cost? If the repair factor is 0.25 x 10-4 and for good conditions the job factor is 0.8, determine the estimated repair cost per operating hour? If major overhaul costs are estimated at 15% of the net capital cost and this occurs every 20,000 hours determine the major overhaul cost per operating hour? If maintenance labour costs are $50/ person hour, a single maintenance person is required and the maintenance labour requirement is estimated at 0.8 person hours per operating hour determine the maintenance labour cost? Determine the total maintenance costStep by Step Solution
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