7. 5.29 A West Virginia coal mining operation has installed an in-shaft monitoring system for oxygen tank and gear readiness for emergencies.

Based on maintenance patterns for previous systems, costs are minimal for the first few years, then they increase for a time period, and then level off. Maintenance costs are expected to be $150,000 in year 3, $175,000 in year 4, and amounts increasing by $25,000 per year through year 6 and remain constant thereafter for the expected 10-year life of this system. If similar systems will replace the current one, determine the perpetual equivalent annual maintenance cost at i = 10% per year.

(a) Solve using tabulated factors.

(b) (Spreadsheet exercises) Solve using a spreadsheet, and

(c) write a single-cell PMT function to find AW using the cell entries.