The purchase price of an instrument is 12000 and its


The purchase price of an instrument is $12,000 and its estimated mainte­nance costs are $500 for the first year, $1500 for the second and $2500 for the third year. After three years of use the instrument is replaced; it has no salvage value. Compute the present equivalent cost of the instrument using 10% interest.

a) $14,070    b) $15,570    c) $15,730 d) $16,500

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Financial Management: The purchase price of an instrument is 12000 and its
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