You have purchased a machine costing $30,000. The machine will be used for two years, at the end of which
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?

Question

Quizplus · Accepted Answer

The Answer of You have purchased a machine costing $30,000. The machine will be used for two years, at the end of which
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?

You Have Purchased a Machine Costing $30,000