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A firm expects to install smog control equipment on the exhaust of a gasoline engine....

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Accounting

A firm expects to install smog control equipment on the exhaust of a gasoline engine. The local smog control district has agreed to pay to the firm a lump sum of money to provide for the first cost of the equipment and maintenance during its 10-year useful life. At the end of 10 years the equipment, which initially cost $10,000, is valueless. The firm and the smog control district have agreed that the following are reasonable estimates of the end-of-year maintenance costs:
Year 12345
$75100125150175
Year 678910
$200225250275300
Assuming interest at 6% per year, how much should the smog control district pay to the firm now to provide for the first cost of the equipment and its maintenance for 10 years?

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