the life time of an asset to zero, leading to a very high price at the beginning of the asset life time and a zero price at the end. 6.3.4 A more adequate approach for service price setting are annuities, as they keep the combination of depreciation and return on capital constant over the life-time of an asset. In this case the Service Cost is calculated as: SERVICE COST = OPEX + ANNUALIZATION FACTOR * CAPEX The formula for calculating the annualization factor of annuities is: Cost of capital/{1-[1/(1+cost of capital)]^asset life} 6.3.5 Infrastructure Providers are advised to base their price calculation on annuities. Infrastructure Providers may be requested to present detailed calculations to the Authority. 9