Following table gives the operation cost, maintenance cost and salvage value at the end of every year of a machine whose purchase value is ! 20,000.

(a) Find the economic life of the machine assuming interest rate, i = 0%.

(b) Find the economic life of the machine assuming interest rate, i = 15%.

End of Year (n) Operation Cost at the End of Year (!)

Maintenance Cost at the End of Year (!)

Salvage Value at the End of Year (!)

1 2000 200 10000 2 3000 300 9000 3 4000 400 8000 4 5000 500 7000 5 6000 600 6000 6 7000 700 5000 7 8000 800 4000 8 9000 900 3000 9 10000 1000 2000 10 11000 1100 1000 AppendixLO1