Following table gives the operation cost, maintenance cost and salvage value at the end of every year of a machine whose purchase value is ! 12,000. Find the economic life of the machine assuming

(a) the interest rate as 0%.

(b) the interest rate as 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 2500 8000 2 3000 3000 7000 3 4000 3500 6000 4 5000 4000 5000 5 6000 4500 4000 6 7000 5000 3000 7 8000 5500 2000 8 9000 6000 1000 AppendixLO1