To decrease the costs of operating a lock in a large river, a new system of operation is proposed. The system will cost $1,070,000 to design and build.

It is estimated that it will have to be reworked every 10 years at a cost of

$140,000. In addition, an expenditure of $70,000 will have to be made at the end of the fifth year for a new type of gear that will not be available until then. Annual operating costs are expected to be $80,000 for the first 15 years and $120,000 a year thereafter. Compute the capitalized cost of perpetual service at i = 9%.