You are considering investing $61,000 in new equipment. You estimate that the net cash flows will be $20,000 during the first year, but will increase by $2,100 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of $4,000 at that time. Assume an interest rate of 9%.

(a) Determine the annual capital cost (ownership cost) for the equipment.