An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected to be $1,500, with software upgrades increasing by $500 per year from $5,000 in year 1. If the robot has an eight-year life, what is the present value of the costs of owning it? Assume that the robot has no salvage value.

Assume the annual interest rate is 10%. Draw a cash flow diagram for the answer and list all of calculation steps and formulas with an explanation sentence.