New Tractor purchase price: $140,000
Estimated useful life: 12,000 hours
Salvage value: 20% of its purchase price
Three possible scenarios:
Scenario A: Average usage of 800 hrs / yr
Scenario B: Average usage of 1000 hrs / yr
Scenario C: Average usage of 1500 hrs / yr
Estimated Operating Costs: $42.00 / hr
Desired profit: 3% of the entire ownership, operating cost
Effective Interest (MARR): 12%
Equipment rate to charge to the project for each scenario?