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E. <br />®) <br />E <br />- 2 - <br />Since we are looking at a long-term investment, and are trying to <br />speculate what the cost of operating and owning will be for this <br />equipment, T have done some research to find an estimated resale <br />value of both of these pieces of equipment. The resource I used <br />is entitled, The Last Bid, and is published by the International <br />Equipment. Exchange. What this bulletin does is give a list of <br />all the auctions held in North America for 1987 and what all of <br />the listed equipment sold for on the open market. I have done <br />this evaluation to substantiate some kind of resale type value 10 <br />10 15 years from now since we probably won't exercise our <br />buy-back optio:: at the end of 5 years. My accumulated data is <br />for 18 units of each type loader from the years 1978 through <br />1984. These units varied in condition from almost new to very <br />good, goad, and fair with a variety of optional equipment. <br />The average price for a Caterpillar 936/930 was $37,639.00. The <br />average price for a John Deere 644 was $31,917.00, a difference <br />of $5,722.00. Since Carlson has bid a John Deere 624E, and they <br />are not on the market because this particular loader is :yew to <br />their line and, in all probability, will not be on the market <br />until after January 1, 1989, I had to use the John Deere 644 <br />which is a bigger machine than the 624. We have no idea what the <br />price would be in the future for a 624; we can only speculate <br />that it would possibly be lower because of a smaller sized loader <br />and a lower initial cost; but history and the figures before you <br />show that the Caterpillar will be worth more in the future. <br />Initial Cost <br />Guaranteed Maintenance <br />Guaranteed Repair <br />Additing Resale Value <br />Average Cost for Owning <br />or 10 Years <br />Caterpillar <br />$ 99,086.OU <br />1,433.00 <br />+ 1,COC.00 <br />- 5,722.00 <br />John Deere <br />$ 95,900.00 <br />+ 1,433.00 <br />+ 0.00 <br />+ 5,722.00 <br />92,931.00 103,055.00 <br />This illustration of approximate resale value shows the <br />Caterpillar in the long run will cost the City less to own and <br />operate and will have a greater resale value at the end of our <br />depreciation term. These are long-term figures and are available <br />to everyone. As mentioned earlier, John Deere chose not to even <br />bid a minimum resale value in our specification. If they are not <br />willing to tell us what their equipment will be worth in 1 <br />through 5 years, why should we take any unecessary chances on the <br />resale value of the equipment. <br />