Wildhorse Communications contracted to set up a call center for the City of Phoenix. Under the terms of the contract, Wildhorse Communications will design and set-up a call center with the following costs: Design of call center $24500 Computers, servers, telephone equipment $640000 Software $215000 Installation and testing of equipment $39000 Selling commission $59000 Annual service contract $145000 In addition, Wildhorse Communications will maintain and service the equipment and software to ensure smooth operations of the call center for an annual fee of $225000. Ownership of equipment installed remains with the City of Phoenix. The contract costs that should be capitalized is