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How do you set the hourly rate for a piece of equipment that is hired by the hour? Operating cost should be easy to figure out. I have a good history of maintnance costs. What I am not sure of is overhead, return on investment and profit. If the machine generates 10% of my annual revenue, should it cover 10% of overhead(rent, heat, lights phone)? If it is a $100,000 machine, should it generate 5% return on investment plus 10% profit or should the profit be 10% of the hourly cost of operation?
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How do you set the hourly rate for a piece of equipment that is hired by the hour? Operating cost should be easy to figure out. I have a good history of maintnance costs. What I am not sure of is overhead, return on investment and profit. If the machine generates 10% of my annual revenue, should it cover 10% of overhead(rent, heat, lights phone)? If it is a $100,000 machine, should it generate 5% return on investment plus 10% profit or should the profit be 10% of the hourly cost of operation?