Determine the expected annual net savings

Reference no: EM13213884

You have purchased equipment costing $20,000. The equipment will be used for two years, and at the end of two years, its salvage value is expected to be $10,000. The equipment will be used 6,000 hours the first year and 8,000 hours the second year. The expected annual net savings will be $30,000 the first year and $40,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine hour?

Reference no: EM13213884

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