Suppose the average cost of maintenance for a piece of equipment is related to its life as follows:

6.14 Production and Operations Management Period Cost, Rs. Period Cost, Rs.
1 507230 2 708270 3 909340 4 120 10 410 5 150 11 480 6 190 12 560 If the purchase price of the new equipment is Rs. 1,600, what is the optimal life of the equipment (when replacement with new equipment is done)?
(Assume that there is no salvage value. The firm uses 10% discount rate per period.)