EXAMPLE 8.2 The following table gives the operation cost, maintenance cost and salvage value at the end of every year of a machine whose purchase value is Rs. 20,000. Find the economic life of the machine assuming interest rate, i = 15%. End of year N 1 2 3 4 5 Operation cost Maintenance at the end of cost at the year (Rs.) end of year (Rs.) 3,000 300 4,000 400 5,000 500 6,000 600 7,000 700 8,000 800 9,000 900 10,000 1,000 11,000 1,100 12,000 1,200 Salvage value at the end of year (Rs.) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 6 7 8 9 10