Your company has just been awarded a large contract that would be well suited for Caterpillar 740B Articulated Haul Trucks. A local rental yard said that they will rent you the trucks for $13,200 per month plus 7.0% sales tax not including any operating c

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Question 1		(16 POINTS)
	What is the Average Annual Investmentfor this machine?







Question 2		(24 POINTS)
	What is the ownership cost per hour?














Question 3		(36 POINTS)
	What is the operating cost per hour?















Question 4		(8 POINTS)
	What is the total cost per hour to your company if you were to own this machine?







Question 5		(8 POINTS)
	What is the total cost per hour to your company if you were to rent this machine?






Question 6		(8 POINTS)
	For only this project, would it be more economical to rent or buy this machine? Explain why.






Question 7		(BONUS POINTS)
	In considering owning vs renting, what is the breakeven point in hours (i.e. how many hours would you need to utilize the equipment before it becomes more economical to own the machine)?

Answer(1)

Brick Kin

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9 years ago

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