Mr. Jhon wants to start a new project, which requires expenditure of $ 2 million now and $5,00,000 in 10 years. The project is expected to have a life of 20 years after which it will have an estimated salvage value of $3,00,000. Annual costs of maintenance are estimated as $10,000 for year one and are expected to increase by $1000/year throughout the life of the facility. Insurance and property tax costs are estimated to be $15,000/year for each of the first 5 years and $ 20,000/year thereafter. Periodic reconditioning costs of $1,00,000 are estimated at the end of every 10th year. The project will also bring an extra $5000 (revenue) in every 5 years. Compute he total cost of the project using PEC (present equivalent cost) method when i = 10%