You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine 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 rm s interest rate is 15%, what would be the machine cost per hour?

You just purchased a pin inserting machine to relieve some bottleneck

1.	You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine 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 rm s interest rate is 15%, what would be the machine cost per hour?
A.	8.79
B.	7.85
C.	11.85
D.	5.89
Answer» B. 7.85