Knochem Down Clearing Contractors Purchases A Dozer With A Delivered Price Of

Knochem Down clearing contractors purchases a dozer with a delivered price of$530000.The company believes it can sell the used dozer after five years(1800hr/yr)of service for$70000.There will be no major overhauls.The company’s cost of capital is 8.3%and its tax rate is 35%.Property taxes,insurance and storage will run 5%.What is the owning cost for the dozer?Use the time value method to calculate the depreciated portion of the ownership cost.