A small company heats its building and will spend

$9,350

in year 1 on natural gas for this purpose. Cost increases of natural gas are expected to be

10%

per year starting year 2. Their maintenance on the gas furnace is going to be

$397.60

in the first year and this expense is expected to increase by

12%

per year starting year 2. If the planning horizon is

14

years, what is the total annual equivalent expense for operating and maintaining the furnace? The interest rate is

15%

per year.

Question content area bottom

Part 1

(a) The total present worth of operating and maintaining the furnace is

$enter your response here.

(Round to nearest dollar)

(b) The total annual equivalent expense for operating and maintaining the furnace is

$enter your response here.

(Round to nearest dollar)