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Hourly owning cost

A truck is purchased for $1,500,000 and is planned to have an operating life of 10 years working 5,000 hours per year. What is the hourly owning cost of this machine , assuming the company requires a 16% return on investment ,using
a) the average investment method
b) the equivalent lease cost method

Solution Summary

The solution explains how to calculate the hourly owning cost of the truck under a) the average investment method b) the equivalent lease cost method

$2.19