Problem: An excavator has a purchase price of $2,000,000, has a rating of 1,500 kW, an estimated life of 10 years an annual operating usage of 2,500 hours. A return on investment of 15% is required. For the following conditions determine the owning cost, total operating and total cost per operating hour for the excavator.
1) Fuel cost $0.25/l, load factor 0.5, fuel consumption of 0.3 l/kW per hour
2) Lubrication @ 25% of fuel cost
3) Wear cost allowance = $ 19.75 per hour
4) Repair factor of 0.25 x 10-4, job factor of 1
5) Major overhaul every 10,000 hours, at 15% of capital cost
6) Maintenance labour costed on maintenance ratio of 1.25 hours/operating hour, personnel costing $45,000/ person year. Single operator required per shift, 3 shifts per day at an operator cost of $47,000 per person year