Question: A chemical plant is considering installing a new water purification system which costs $21500. The expected service life of the system is 10 years and the salvage value is computed using the declining-balance method with a depreciation rate of 16%. The operating and maintenance costs are estimated to be $5 per hour of operation. The expected savings is $10 per operating hour. What is the break-even level of operating hours under the MARR of 8%?