Currently, a firm replaces its equipment every year. It has calculated the equivalent annual cost of replacement as follows:

Replacement Salvage EAC Capital Annual EAC Repair Period Value Costs Repair Costs Costs $1,420 $1,287 2 $1, 102 $1,082 $400 $189 W $910 $976 $600 $298 4 $795 $812 $800 $437 $580 $673 $1,200 $592