An excavator costs $250,000 when purchased new. The service…
An excavator costs $250,000 when purchased new. The service life is 14,000 hours. A contractor is planning to use it for seven years (average 2000 hours per year). They expect to salvage it for $40,000. The annual operating cost of the excavator will be $100,000 per year. The contractor anticipates to borrow money at 9% to purchase the excavator. What would be the hourly ownership and operating cost of the equipment?