An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away. 180 mm pipes are being considered. For this analysis, the company will use an annual interest rate of 10%. Annual maintenance and pumping costs may be considered to be paid in their entireties at the end of the year in which their costs are incurred. Initial Cost Service Life Salvage Value Annual Maintenance Pump cost/hour Pump operation 180 mm pipe $3,500 12 years $400 $200 $1.00 600 hours/year What is the present worth of the 180 mm pipe over the first 12 years of operation if operating costs increase by $0.75 (to a total of $1.75 per hour) beginning in year 7