Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 54

You have purchased a machine costing $30,000. The machine will be used for two years, and at the end of this time, its salvage value is expected to be $18,000. The machine will be used 6,000 hours during the first year and 8,000 hours during the second year. The expected annual net savings will be $35,000 during the first year and $42,000 during the second year. If your interest rate is 12%, what would be the equivalent net savings per machine hour