A small town wants to acquire an electric generator facility for half a million dollars. It will cost approximately $4,500/year to maintain the facility. The facility has an expected useful life of about 50 years. The annual interest rate is 6%
a. What is the present worth of the capital and maintenance costs of the facility? (May need a cash flow diagram)
b. What is the EUAC (equivalent uniform annual cost) of the facility over its useful life?