Pushem Down clearing contractors purchases a track dozer with a delivered price of $275,000. The company believes it can sell the used dozer after 4 yr of service (2,000 hr/yr) for $56,000. There will be no major overhauls. The company’s cost of capital is 9.2%. Property taxes, insurance, and storage will run 4% of AAI.
What is the cost per operating hour due to the purchase price and inflow due the salvage price using time value method?