Airodyne Wind, Inc. has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component’s PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project.

First cost, $ ..........................................−800,000
Replacement cost, year 2, $ .............−300,000
AOC, $/year ........................................−950,000
Salvage value, $ ...................................250,000
Life, years ........................................................4
Interest rate, % ............................................10