A water treatment plant uses a water filter id system (WFS) to clean and purify the water for a power plant. The power plant has been using a similar type of water filtering system over the past several years. The installed cost of new WFS has remained relatively constant at $100,000. Records of operation and maintenance expenses indicate the following average expenses per year as a function of the age of the WFS.
The market values of the WFS are also reasonably well known as a function of age. Given the information below determine the best life time to replace the WFS if MARR is 12% per year.