A pallette conveyor system used to transport pallettes of product at the Browning Harvey plant in St$.$ John's costs $$230,000$ plus $$30,000$ to install. It is estimated to depreciate at a declining balance rate of $25\%$ per year over its $15-$year useful life. Annual maintenance costs are estimated to be $$6,000$ for the first year, increasing by $20\%$ every year thereafter. In addition, every third year, the rollers must be replaced at a cost of $$6,000.$ Interest is at $11\%.$

Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, and the EAC of each of Capital Costs, Maintenance Costs and a Total Equivalent Annual Costs $($as used in the lectures and is shown below$).$

The economic life of the conveyor system is determined by the year that has the lowest Total Equivalent Annual Cost. Complete the row of the table below, inputting data for the row that has the lowest Total Equivalent Annual Cost from your spreadsheet for this project:Question $2$

Question Value: $25$

A pallette conveyor system used to transport pallettes of product at the Browning Harvey plant in St$.$ John's costs $$230,000$ plus

$$30,000$ to install. It is estimated to depreciate at a declining balance rate of $25\%$ per year over its $15-$year useful life. Annual

maintenance costs are estimated to be $$6,000$ for the first year, increasing by $20\%$ every year thereafter. In addition, every third

year, the rollers must be replaced at a cost of $$6,000.$ Interest is at $11\%.$

Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, and the EAC of each of

Capital Costs, Maintenance Costs and a Total Equivalent Annual Costs $($as used in the lectures and is shown below$).$

The economic life of the conveyor system is determined by the year that has the lowest Total Equivalent Annual Cost. Complete

the row of the table below, inputting data for the row that has the lowest Total Equivalent Annual Cost from your spreadsheet this project:

$***$Please show how to calculate EAC capital and EAC maintenance.$***$