A specific requirement of a company can be met by machine A. The machine A costs

! 10,000. The maintenance cost during the first year of its operation is ! 2000 and it increases by ! 800 every year thereafter up to its fourth year of operation. The maintenance cost during the fifth year is ! 6000 and it increases by ! 1000 every year thereafter. Find the economic life of the machine by assuming an interest rate of 12%.

AppendixLO1