Q 1 What is the net present cost of the DSI cars Year LRP D
Q 1. What is the net present cost of the DSI cars ?
Year LRP DSI 0 $275,000 $195,000 1 $10,000 $15,000 2 $10,000 $15,000 3 $10,000 $15,000 4 $10,000$15,000 5 $10,000 $15,000 6 $10,000 $15,000 7 $10,000 8 $10,000 9 $10,000 10 $10,000 Given this information answer questions Solution
Net present cost = 264,343.19
| Discount rate | 8.0000% | ||
| Cash flows | Year | Discounted CF= cash flows/(1+rate)^year | Cumulative cash flow |
| 195,000.00 | 0 | 195,000.00 | 195,000.00 |
| 15,000.000 | 1 | 13,888.89 | 208,888.89 |
| 15,000.000 | 2 | 12,860.08 | 221,748.97 |
| 15,000.000 | 3 | 11,907.48 | 233,656.45 |
| 15,000.000 | 4 | 11,025.45 | 244,681.90 |
| 15,000.000 | 5 | 10,208.75 | 254,890.65 |
| 15,000.000 | 6 | 9,452.54 | 264,343.19 |
