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You Just Purchased a Pin Inserting Machine to Relieve Some

Question 11

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You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in
manufacturing a PC board. The machine would cost $56,000 and has an estimated service life of 5 years. At that
time, the estimated salvage value would be $5,000. The machine is expected to operate 2,500 hours per year. The
expected annual operating and maintenance cost would be $6,000. If your firm's interest rate is 15%, what
would be the machine cost per operating hour?

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