A company has decided to replace its inspection machine with an advanced one. The advanced machine costs $15,000 and will have operating costs of $3,600 in the first year, increasing by $2,000 per year thereafter. The expected salvage value of the new machine is $6,000 at the end of the first year and will decline by 10% of the preceding S.V. each year. Use i = 8% to determine

a. OC for year 2

b. CR cost for year 3

c. Total cost for year 4

d. The economic service life of the inspection machine