Q 1 what is the annualized cost of the LRP cars Year LRP DS

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 iven this information answer questions 4

Solution

PV = 342,100.81, FV = 0, N = 10, rate = 8%

use PMT functon in Excel

annualized costs = 50,983.11

Discount rate	8.0000%
Cash flows	Year	Discounted CF= cash flows/(1+rate)^year	Cumulative cash flow
275,000.00	0	275,000.00	275,000.00
10,000.000	1	9,259.26	284,259.26
10,000.000	2	8,573.39	292,832.65
10,000.000	3	7,938.32	300,770.97
10,000.000	4	7,350.30	308,121.27
10,000.000	5	6,805.83	314,927.10
10,000.000	6	6,301.70	321,228.80
10,000.000	7	5,834.90	327,063.70
10,000.000	8	5,402.69	332,466.39
10,000.000	9	5,002.49	337,468.88
10,000.000	10	4,631.93	342,100.81