L+M* module cost for the pump is $20000 q 3 = $60000. The cost of the installed instrumentation, from above, is $7000 for a total of $67000 = L+M cost. To the L+M cost is added the taxes, freight and insurance at 15–25% of FOB cost to yield the physical module cost, PM cost = $67000 + 18% q $20000 ($3600) = $70600.
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