An airline is considering two types of engine systems for use in its planes. Each has the same life and the same maintenance and repair record. SYSTEM A costs $90,000 and uses 52,000 gallons of fuel per 1,800 hours of operation at the average load encountered in passenger service. SYSTEM B costs $180,000 and uses 48,000 gallons of fuel per 1,800 hours of operation at the same level. Both engine systems have three-year lives. Each system's salvage value is 10.4% of its initial investment. If jet fuel currently costs $2.18 a gallon and fuel consumption is expected to increase at the rate of 7.1% per year because of degrading engine efficiency, which engine system should the firm install? Assume 3,000 hours of operation per year and a MARR of 12.8%. Use the annual equivalent cost criterion. What is the annual equivalent cost of the preferred engine?