# Cost Analysis Calculator

Deciding if you should buy something expensive? Looking at JUST the price doesn't make sense. Sometimes it's helpful to review the Cost-Per-Hour. Enter the cost and usage here:
How much does it cost?
\$
Hours used per day:

New Phone \$800  |  MacBook Pro \$1,800  |  Porsche 911 \$89,000

If you use it for 1 year, it costs \$1.46/hour

If you use it for 2 years, it costs \$0.73/hour

If you use it for 3 years, it costs \$0.48/hour

If you use it for 4 years, it costs \$0.36/hour

If you use it for 5 years, it costs \$0.29/hour

If you use it for 6 years, it costs \$0.22/hour

If you use it for 7 years, it costs \$0.19/hour

If you use it for 8 years, it costs \$0.16/hour

If you use it for 9 years, it costs \$0.14/hour

If you use it for 10 years, it costs \$0.15/hour

# How this cost analysis works:

Let's say I already have a computer, but I'm deciding if I should buy a brand new MacBook Pro laptop. That's an \$1,800 investment....yeesh :-/ Now that \$1,800 price tag might cause some sticker shock, but what if we ran this through our Cost Analysis Calculator to figure out the cost-per-hour?

MacBook Pro cost = \$1,800.
Hours used per day = 8 hours.
Years will use this for = 3 years.

We'll use this formula for our calculation: *NOTE* We use 300 days per year instead of 365 to account for weekends and days off.

Now we plug all the numbers into the formula, and get this:

Cost Per Hour = [COST] / ([Hours Per Day] x [300 days] x [Years])

....which translates to....

\$0.25 = [\$1,800] / ( x [300 days] x )

This shows us that if we use this Macbook Pro for 8 hours a day, for 300 days a year, for 3 years.....this computer actually only costs \$0.25 per hour!!!!

Running the numbers through the calculator above instantly shows you how much it costs per year to operate: If your laptop is one of the main tools you use to produce work, then this \$1,800 laptop is actually very cheap!

# Let's Buy Something More Expensive:

Now let's say we wanna buy a Porsche 911. It costs about \$89,000 and it's pretty sweet! Now there's nothing wrong with buying a fancy car, but let's run it through the cost-per-hour calculator:

Cost Per Hour = [COST] / ([Hours Per Day] x [300 days] x [Years])

....which translates to....

\$98 per hour= [\$89,000] / ( x [300 days] x )

This means assuming we drive the car for 1 hour a day, for 3 years....it still costs \$98 an hour to operate. Yikkees....

But let's say you drive the car 4 hours per because you drive in a lot of traffic. Over the 3 years the Porsche 911 comes down to just \$24/hour to operate.

However if you bought a reasonably priced used car for \$25,000 and drove it the same, it would only cost \$7/hour.

So if you're deciding to buy something, run it through this Cost Analysis Calculator to figure out the Cost Per Hour first. The results are very helpful in deciding! Sincerely,
Neville Medhora - Cost Analyzer & Copywriter

×
×
• Create New...