Question

In: Accounting

Use the following information to answer the question A farmer is contemplating the purchase of a...

Use the following information to answer the question

A farmer is contemplating the purchase of a 600 HP 4WD tractor with a purchase price of $685,000 and a 33% retained value. The optimal years of use are 15. The annual hours of use are 450. Fuel use is 91 L/hr at a cost of $0.90/L. Repair rates are 2.5% of the purchase price per year. Insurance and housing is 1% of purchase price. The interest rate is 3.0%.

What are the Total Ownership Costs (fixed costs) per hour of use? Remember Ownership Costs include depreciation, interest on investment plus insurance and housing.

Solutions

Expert Solution

Total cost of ownership (TCO) is the purchase price of an asset plus the costs of operation

Given,

purchase price of $685,000 and a 33% retained value.

The optimal years of use are 15.

The annual hours of use are 450.

Fuel use is 91 L/hr at a cost of $0.90/L.

Repair rates are 2.5% of the purchase price per year.

Insurance and housing is 1% of purchase price.

The interest rate is 3.0%

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Use the information below to answer the following question(s). The following information pertains to Brady's Tires:...
Use the information below to answer the following question(s). The following information pertains to Brady's Tires: Manufacturing costs S1,700,000 Units manufactured 20.000 Units sold 19 500 units sold for $85 per unit Beginning inventory units 1. What is the average manufacturing cost per unit? a. $55.10 b. $56.00 c. $54.18 d. $85.00 e. $54.19 2. What is the amount of ending finished goods inventory? a. $27,550 b. $28,000 c. $27,090 d. $42,500 e. $27,095 3. What is the amount of...
Use the information below to answer the following question. The following lots of a particular commodity...
Use the information below to answer the following question. The following lots of a particular commodity were available for sale during the year: Beginning inventory 5 units at $61 First purchase 15 units at $63 Second purchase 10 units at $74 Third purchase 10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of merchandise sold for the...
Use the following information to answer to answer this question. National Income (Y) = 5,200; Budget...
Use the following information to answer to answer this question. National Income (Y) = 5,200; Budget Deficit = 150; Disposable Income (Yd) = 4,400; Consumption (C) = 4,100; Net Export = 0. The value of Private Saving is Group of answer choices A -150 B 150 C 280 D 300 E none of the above Flag this Question Question 181 pts Consider the IS-LM framework. Suppose there is a policy mix of expansionary monetary policy and contractionary fiscal policy. This...
Use the following information to answer the question. The phylum Cycliophora was discovered in 1995. They...
Use the following information to answer the question. The phylum Cycliophora was discovered in 1995. They are tiny organisms that live in large numbers on the outsides of the mouthparts and appendages of lobsters. The feeding stage permanently attaches to the lobster via an adhesive disk and collects scraps of food from its host's feeding by capturing the scraps in a current created by a ring of cilia. The body is saclike and has a U-shaped intestine that brings the...
Use the information in the following table to answer the question. Note the fund started with...
Use the information in the following table to answer the question. Note the fund started with 100 Net Asset Value at the start of 2012. 2012 2013 2014 2015 2016 2017 2018 2019 Return 7.7% 10.4% 21.9% -2.2% 24.8% -20.5% 12.8% 7.7% Asset Value 107.67 118.83 144.83 141.67 176.83 140.50 158.50 170.67 1)Given the above hedge fund manager’s performance, which year(s) would the manager get paid on their high watermark? 2)Calculate the rolling 3 years' average returns and identify which...
Use this information for Harry Company to answer the question that follow. The following data are...
Use this information for Harry Company to answer the question that follow. The following data are given for Harry Company: Budgeted production 1,033 units Actual production 957 units Materials: Standard price per ounce $1.823 Standard ounces per completed unit 12 Actual ounces purchased and used in production 11,829 Actual price paid for materials $24,249 Labor: Standard hourly labor rate $14.02 per hour Standard hours allowed per completed unit 4.1 Actual labor hours worked 4,929 Actual total labor costs $80,096 Overhead:...
Use the information in the following table to answer the question. Note the fund started with...
Use the information in the following table to answer the question. Note the fund started with 100 Net Asset Value at the start of 2012. 2012 2013 2014 2015 2016 2017 2018 2019 Return 8.0% 4.0% 1.7% -4.5% 9.7% 10.7% -0.3% -14.1% Asset Value 108.00 112.36 114.27 109.18 119.82 132.64 132.27 113.64 Given the above hedge fund manager’s performance, which year(s) would the manager get paid on their high water mark? (1.5 marks). Calculate the rolling 3 years average returns...
Use the following information to answer Question 24 to Question 25: A poll was taken every...
Use the following information to answer Question 24 to Question 25: A poll was taken every month on how voters will vote on the next federal election. Here are the results of the poll: Sample Size Liberal Voters This Month 550 324 Last Month 700 406 24. (4 points) Develop a 95% confidence interval estimate for the difference between the proportions of voters who will vote for the Liberals in the two populations. Show your calculations. 25. (2 points) From...
Use the following information to answer Question 3 to Question 7 : The closing stock price...
Use the following information to answer Question 3 to Question 7 : The closing stock price of Amazon.com, Inc. for the past 9 days is shown: 86, 88, 87, 86, 85, 90, 93, 82, 89 3. (16 points) The standard deviation of the sample is 4. (12 points) The median of the sample is 5. (24 points) IQR of the sample is 6. (10 points) Mode of the sample is 7. (10 points) Range of the sample is
QUESTION 7 Use the following information to answer the next two questions: (Question 1 of 2)...
QUESTION 7 Use the following information to answer the next two questions: (Question 1 of 2) Higgins Company purchased specialized equipment on July 1, 2019, that cost $300,000, has a residual value of $40,000, and a useful life of four years. The amount of depreciation expense for 2020, under the double declining balance method is: A. $112,500. B. None of the above C. $97,500. D. $75,000. E. $125,000. 2 points    QUESTION 7 B Use the following information to answer...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT