One machine needed for Cold Mountain is a Diamond Cutting Diamond Cutter, which costs $40,000 to purchase and $10,000 per year to operate. The operating costs increase by 10% per year every year after year 1.The machine has no salvage value, and a 20-year life.

a)What is the equivalent uniform annual cost of the Diamond Cutting Diamond Cutter machine over its entire life [magnitude only]? (at 10% rate interest)

b) If the purchase price of the Diamond Cutting Diamond Cutter remains the same, when should a new one be purchased? If you should wait until the end of its life then enter 20. Otherwise enter the year when a new one should be bought.