What is the total annual fixed cost for a $45,000 tractor with a 12-year life and a $9,000 salvage value, when insurance and taxes are 2 percent of average value and there is a 9 percent opportunity cost on capital? What is the average fixed cost per hour if the tractor is used 400 hours per year? If it is used 700 hours per year?
Average annual depreciation =
Average value =
Average annual interest cost =
Average annual insurance and taxes =
Total annual fixed (ownership) cost=
Average fixed cost per hour at 400 hours per year=
Average fixed cost per hour at 700 hours per year=