10. 5.10 A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. At an interest rate of 10% per year, what is the equivalent annual cost of the project?

Find the AW value using

(a) tabulated factors, and

(b) a spreadsheet.

Table Summary: A table divided into two columns shows the items to consider for obtaining the annual cost of the project in the first column, and the numeric value of the items in the second column.

First cost, $ −800,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −950,000 Salvage value, $ 250,000 Life, years 4