Using combined depreciation and investment cost determine the probablecost per hour of owning and operating a caterpillar that uses rubber tires. Theequipment is a 185-hp diesel engine and the following conditions apply. (40)

Factor delivered price = $ 472,550

Sales tax = 6.5% of delivered price

Unloading and assembling = $2,175

Salvage value = $ 115,000

Useful life = $ 6 yr.

Hours used per year = 1,675 hr

Interest on investment = 9.5%

Maintenance and repair = 65% of straight line depreciation

Diesel engine = 185 hp

Operating factor = 0.60

Fuel cost = $5.45/gal

Crankcase capacity = 9 gal

Hours between oil changes = 135 hr.

Oil cost = $14.25/gal

Tires = $ 62,500

Tire life = 4950 hr.

Tire repairs = 12% of tire depreciation

Using information from above, assume that an operator will cost $ 26.64/hr. and

requires an assistant that is paid 2/3 the operators cost per hour. The operator andassistant can deliver 75 sq. ft. demolition in an hour. What is the total equipment andcost and the equivalent sq. ft. cost per hour.