A firm can purchase a centrifugal separator (5-year MACRS property) for $21,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be $2,100. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 28% and the MARR is 10% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis?

GDS Recovery Rates (r for the Six Personal Property Classes Recovery Period (and Property Class) Year 3-year 0.3333 0.4445 0.1481 0.0741 10-year 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0656 0.0655 0.0328 15-yearb 0.0500 0.0950 0.0855 0.0770 0.0693 0.0623 0.0590 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0590 0.0591 0.0295 20-year 0.0375 0.0722 0.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0447 0.0447 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 5-year 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 7-yeara 0.1429 0.2449 0.1749 0.1249 0.0893 0.0892 0.0893 0.0446 2 3 4 6 17 20 aThese rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000 These rates are determined with the 150% DB method instead of the 200% DB method (with switchover to the SL method) and are rounded off to four decimal places