Problem

A 260-fwhp diesel-powered wheel loader will be used to load shot rock. This loader was pur...

A 260-fwhp diesel-powered wheel loader will be used to load shot rock. This loader was purchased for $330,000. The estimated salvage value at the end of 4 years is $85,000. The company’s cost-of-capital is 8.7%. A set of tires costs $32,000. The work will be at an efficiency equal to a 45-min hour. The engine will work at full throttle while loading the bucket (33% of the time) and a three-quarter throttle to travel and dump. The crankcase capacity is 10 gal and the company has a policy to change oil every 100 hours on this job. The annual cost of repairs equals 70% of the straight-line machine depreciation. Fuel cost $1.07/gal, and oil is $2.50/gal. The cost of other lubricants and filters is $0.45/hr. Tire repair is 17% of tire depreciation. The tires should give 3,000 hours of service. The loader will work 1,500 hr/yr. In this usage, the estimated life for bucket teeth is 120 hours. The local price for a set of teeth is $640. What is the operating cost for the loader in this application? ($48.483/hr)

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Solutions For Problems in Chapter 12