Problem

Asphalt Pavers, Inc. purchases a loader to use at its asphalt plant.  The purchase price d...

Asphalt Pavers, Inc. purchases a loader to use at its asphalt plant.  The purchase price delivered is $235,000.  Tires for this machine cost $24,000.  The company believes it can sell the loader after seven years (3,000 hr/yr) of service for $79,000.  There will be no major overhauls.  The company’s cost-of-capital is 6.3%.  What is the depreciation part of this machine’s ownership cost?  Use the time value method to calculate depreciation. ($9.236/hr)

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Solutions For Problems in Chapter 12