Answer:
35,972
Explanation:
The equivalent annual cost can be calculated dividing NPV by the annuity factor
In order to find NPV first
                                    Year1    Year2   Year3   Year4  Year5         Total
Operating and
Maintenance              18000 21000  24000  27000 30000          -
Discount factor(10%)  0.909   0.826   0.751   0.683   0.620           -
Discounted CFs          16362   17346  18024    18411   18600      88,713
Salvage                                                                          12000   
Discount factor(10%)                                                     0.620
Discounted salvage                                                      7440        (7440)
Inital Cost                   (55,000)                                                      (55,000)
NPV                                                                                                136,333
Calculation for EAC
NPV = 136,333
Annuity factor for 5 years = 3.790
Equivalent annual cost = NPV /Annuity factor
Equivalent annual cost = 136,333/3.790
Equivalent annual cost = 35,972