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Problem 4. A contractor has purchased a single-engine scraper for $280,000 and expects to use it about 1,500 hours per year. The contractor expects to
Problem 4. A contractor has purchased a single-engine scraper for $280,000 and expects to use it about 1,500 hours per year. The contractor expects to sell the scraper after using it for 12,000 hours for $56,000. Tires for the scraper cost $8,000 for a set of four. The scraper is powered by a 360-hoursepower diesel engine. Diesel fuel costs $2.10 per gallon. a) b) What do you estimate the hourly maintenance and repair cost for the scraper (less tires) to c) What do you estimate the hourly fuel cost to be under average operating conditions? What is the hourly ownership cost for the scraper (less tires) at a minimum attractive rate of return of 14%? be under unfavorable operating conditions? What do you estimate the hourly fuel cost to be for the scraper under average operating conditions? What do you estimate the hourly filter, oil, grease cost to be for the scraper under unfavorable working conditions? d) e)
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