You purchased $100,000 worth horizontal milling machine in your ongoing project. You expect to save labour costs by $30,000 in year 1, $40,000 in year 2 and $60,000 in year 3. This machine will have different operating hours over three years: 1,000 hours between year 0 (now) and year 1, 3,500 hours between year 1 and year 2 and 2,000 hours between year 2 and year 3.

Using the information above, determine the equivalent savings per machine hour at MARR=10%.