7. Equipment Economics: (10 points maximum value). Aardvark Underground plans to buy a new microtunneling machine for $4,500,000. Aardvark believes it can win an average of one microtunneling project each year for the next 10 years with this new machine. They estimate that the MTBM will be used 3 months out of 12 in each of the 10 years and operated an average of 240 hours per month for each of the 3 months. They plan to keep the MTBM for 10 years. They estimate a salvage value of $500,000 at the end of 10 years. The cost of capital is 5.0%. Calculate the annual cost and the cost per hour, using both the Average Annual Investment (AAI) method and the time value of money. Include both the cost of money and straight-line depreciation components in hourly costs with the AAI method. Compare answers using the 2 methods. Are the answers similar? See p7 & 8 table and equations.