Equipment Cost Amortization

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As an industry standard how long do you depreciate or amortize your equipment purchases?Is it too aggressive to amortize a Miller 200 DX over 250 Hours clock time?Quoting some contract work need some answers from the pros. I try to get equipment covered as soon as possible. Once covered I tend to give the customer a break on equipment costs.Mountain MetalDynasty 200DXCoolmate 1Miller Trailblazer 302 W/ KohlerMiller Suitcase 12VS Wire feederWeldcraft 26 TIG TorchMiller 210 Spoolmate 3035Thermal Dynamics 51 PlasmaVictor O/AJet  7x12 L Cooled Band SawDelta Drill Press
Reply:Originally Posted by Mountain MetalAs an industry standard how long do you depreciate or amortize your equipment purchases?Is it too aggressive to amortize a Miller 200 DX over 250 Hours clock time?Quoting some contract work need some answers from the pros. I try to get equipment covered as soon as possible. Once covered I tend to give the customer a break on equipment costs.
Reply:I will expense it in one tax year no credit for me on this type of purchase.I however am looking more for rule of thumb on return on investment for this type of machine.I am quoting a job that I have a fairly good idea of the time I will spend on it. My labor rate and consumables is known.I need to factor hourly equipment costs. @ $4500 cost over 250 hours is $18.00 per hour After 250 hours it's paid for. I would assign a reserve cost of $10 for it's replacement. I would be out in front of the cost at this point. I need to be competitive but not at my own cost.I have the tax stratergy covered thats pretty simple, I would just expense it.I would think that 250 hours would be a year worth of operation. In the old economy equipment produced a return much faster. I don't want be too aggressive.Mountain MetalDynasty 200DXCoolmate 1Miller Trailblazer 302 W/ KohlerMiller Suitcase 12VS Wire feederWeldcraft 26 TIG TorchMiller 210 Spoolmate 3035Thermal Dynamics 51 PlasmaVictor O/AJet  7x12 L Cooled Band SawDelta Drill Press