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Below are the projected costs of the initial construction and yearly maintenance of a large municipal swimming pool. Assume an interest rate of 8%. In what year should the pool be replaced. What is the minimum EUAC of the pool to the closest dollar and in what year does it occur?
Year Cost
0 $325,000
1 $0
2 $11,000
3 $15,000
4 $37,000
5 $56,000
6 $78,000
7 $92,000
8 $97,000
9 $108,000
10 $115,000
Describe an unweighted price index and describe how you would construct such an index.
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