A local authority's Fire Service is considering replacement of a turntable ladder which although still serviceable, has steeply rising maintenance costs, and it is thought that a replacement will proof less expensive in the long term. The purchase cost of a new turntable ladder will be $360,000-half payable immediately and half one year from now. The following information is available:- Existing 8 Years Estimated useful life 8 years Replacement 8 Years 8 years Estimated maintenance costs: Year 1 40,000 10,000 Year 2 45,000 10,000 Year 3 50,000 14,000 Year 4 60,000 15,000 Year 5 72,000 18,000 Year 6 80,000 18,000 Year 7 90,000 20,000 Year 8 98,000 22,000 Full Overhauls Year 2 5,000 Year 4 10,000 4,000 Year 6 14,000 Estimated Resale Value Now 10,000 Year 8 1,000 8,000 The local authority applies a cost of capital of 5% in evaluating capital investment proposals.