You have been assigned the task of estimating the annual cost of operating and maintaining a new assembly line in your plant. Your calculations indicate that due to improvements in efficiency and technology, during the first four years the cost will be $600 000 per year; the next five years will cost $520 000 per year; and the following six years will cost $400 000 per year. If the interest rate is constant at 8.2 % over the next 15 years, what will be the equivalent uniform annual cost (EUAC) of operation and maintenance?
What will be an ideal response?
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