Operating cost of this loader in this application

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Reference no: EM131825255

A 262-fwhp diesel-powered wheel loader will be used to load shot rock. This loader was purchased for $350000. The estimated salvage value at the end of four years is $86000.The cost of capital of the company is 7.2%. A set of tires costs $36000.The work efficiency will be equal to a 45-min hour. The engine will work at full throttle(100%) while loading the bucket(33% of the loader working time) and at three-quarter(75%) throttle to travel and dump. The crankcase capacity is 12 gal and the company has the policy to change oil every 100 hours on this job. The annual cost of repairs equals 65% of the straight-line machine depreciation. Fuel cost is $3.25/gal, and oil is $4.45/gal. The cost of other lubricants and filters is $0.45/hr.Tire repair is 18% of tire depreciation. The tires should give 3400 hr of service. The loader will work 1600 hr/yr. In this usage, the estimated life for the bucket is 120 hr.The local price for a set of teeth is $700. What is the operating cost of this loader in this application?

Note: use average throttle factor, 33%of 100%+67%of 75%.

Reference no: EM131825255

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