A new gear grinding machine for composite materials has a first cost of P = $100,000 and can be used for a maximum of 6 years. Its salvage value is estimated by the relation S = P(0.85)", where n is the number of years after purchase. The operating cost will be $75,000 the first year and will increase by $10,000 per year thereafter. Use i = 18% per year.
(a) Determine the economic service life and corresponding AW of this challenger.