A three-year-old machine has a cost of $37,000, an estimated residual value of $1,000, and an estimated useful life of 36,000 machine hours. The company uses units-of-production depreciation and ran the machine 5,000 hours in year 1; 6,850 hours in year 2; and 8,200 hours in year 3. Calculate the net book value at the end of the third year.