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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

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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