Question

guys please write neat and clean with proper units thanks

The purchase cost of an excavating machine is $200000. After a useful life of 6 years, it is assumed the equipment will be sold for $50,000. Assume interest of 9% for borrowing money, and 3% for risk, 1.75% for fuel and lubrication, and 8% for insurance and storage. Using the three methods of deprecation, calculate the annual ownership cost in Year 3 per hour, assuming the equipment will be used 1600 hr/year.

Answer 1

ANSWER

Purchase Cost = $ 200000|- Straight line method: Defericiation (0) = c-s. n 200000 - 50000 216) 0 = 25000 constant of method (D) 1-(&)'n 16 200000 50000 = 0.33

3) Sencing fund method I= S: (148)2-1 1 150000 X 0.2195 (1+0.217561 J 32625 2.25 1 = 14500 $ 1 year

Arl year Assuming the equipment used 1600 kr per hour cost 14500 1600 = 9.0625 $lar 9.0625 $ her so per cost -

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