# 1. A new pipeline is installed.  Annual maintenance and pumping costs are considered to be paid in...

###### Question:

1. A new pipeline is installed.  Annual maintenance and pumping costs are considered to be paid in their entireties at the end of the years in which their costs are incurred (assume that maintenance happens in year 10).  The pipe has the following costs and properties:

Initial cost                         $7,500 Annual interest rate 5% Service life 10 years Salvage value$500

Annual maintenance         $500 Pump cost/hour$2.75

Pump operation                 2000 hours/year

What is the equivalent uniform annual cost (EUAC) of the pipe?

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