2. 9.7 To improve package tracking at a UPS transfer facility, conveyor equipment was upgraded with RFID sensors at a cost of $345,000. The operating cost is expected to be $148,000 per year for the first 3 years and $210,000 for the next 3 years. The salvage value of the equipment is expected to be $140,000 for the first 3 years, but due to obsolescence, it won’t have a significant value after that. The interest rate is 10% per year.

(a) Determine the ESL and equivalent AW using tabulated factors, or

(b) use a spreadsheet to determine the two amounts, plus include a graph of years versus total AW values.Page 295