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Problem # 5 Your company is looking at purchasing a new track hoe at a cost of $ 1 0 0 , 0 0 0

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Problem #5
Your company is looking at purchasing a new track hoe at a cost of $100,000. The track hoe would
have a useful life of five years. At the end of the fifth year the salvage value is estimated to be
$10,000. The track hoe could be billed out at $102.00? hour and costs $31.00? hour to operate. The
operator costs $36.00? hour. Using 1,200 billable hours per year, determine the Rate of Return for the
purchase of the track hoe using a MARR of 20%.
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