A contractor purchases a new heavy-duty excavator for \250,000$. It is expected to have a useful life of$5 \text$and an estimated salvage value of$$50,000$at the end of its life. The contractor plans to use the machine for$2,000 \text$ per year.

Calculate the annual depreciation charge using the Straight-Line method, find its book value after $3 \text{ years}$, and determine the hourly depreciation rate to be included in an estimate.

A company buys a bulldozer for \300,000$. It has a$5\text$useful life and a$$50,000$ estimated salvage value. While straight-line depreciation is common for internal hourly rates, the Double Declining Balance (DDB) method applies a fixed percentage rate (twice the straight-line percentage) to the remaining book value each year. Note that DDB does not initially subtract the salvage value when calculating the base.

Calculate the depreciation charge for Year 1 and Year 2 using the DDB method.

A motor grader with a $250 \text{ HP}$ diesel engine operates under an average load factor of $60\%$. The engine consumes approximately $0.04 \text{ gallons}$ of diesel fuel per horsepower-hour at full load. Diesel fuel costs \4.00$per gallon on-site. The manufacturer recommends estimating lubrication (oil, grease, filters) as$33%$ of the hourly fuel cost.

Calculate the total hourly cost for fuel and lubrication.

An estimator is calculating the internal hourly charge rate for a front-end loader. The machine data is as follows:

• Initial Cost: \180,000$

• Useful Life / Salvage: $10,000 \text{ hours}$ / \30,000$

• Interest, Insurance, Taxes (IIT): estimated flat rate of \4.50/\text$

• Fuel & Consumables: calculated at \18.00/\text$

• Tires: A set of $4$ tires costs \12,000$and lasts$2,500 \text$.

• Routine Repairs/Maintenance: estimated at \8.00/\text$

Calculate the total, unburdened (no operator wage) hourly equipment rate for the loader.