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Question 2: You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it will be wort
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Answer #1

Price=$40,000

Salvage value= $15,000

Usage of machine in first year= 4,000 hours

Usage of machine in second year=6,000 hours

first year savings=$28,000

second year saving=$40,000

Interest rate=10%

Time period=2 years

a capital cost = price -salvage value illte (1+i) 1 & salvage value (i) = (40,000 - 15.000) [0.110.1+1)? 7 + 15,000(0.1) 1 (

c. Net savings generated pes hous Net savings per hour = Annual equivalent savings last year usage agen + 2 + 2 year usage /

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