Determine the perpetual equivalent annual maintenance cost

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An engineering company is working in coal mining operation has installed an in-shaft monitoring system for oxygen tank and gear readiness for emergencies. Based on maintenance patterns for previous systems, costs are minimal for the first few years, increase for a time period, and then level off. Maintenance costs are expected to be $180,000 in year 3, and increase by 6% per year through year 6 and remain constant thereafter for the expected 10-year life of this system. If similar systems will replace the current one, determine the perpetual equivalent annual maintenance cost at i =10% per year.

Reference no: EM13977074

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