Answer:
Calculations below.
Explanation:
The economic service life is 3 years
This is because EUAC is minimized in year 3 at 22655.59
Annual costs are 5000, 8000, 11000, 14000, 17000 and 20000 for six years
Salvage value is 80% of 60000 = 48000 in year 1, 80% of 48000 = 38400 in year 2 and so on
PV of annual cost and salvage value is computed and net present value is computed by adding initial cost of 60000
Finally EUAC is computed using (A/P, i%, n).
Check the document attached to see the calculations
