Homework SourseThe Capital Metro transit CMT is trying to decide between li
The Capital Metro transit CMT is trying to decide between light rail cars manufactured by two different components. LR power ( LRP) cars cost more to buy initially,but they will wear out in six years. The revenue generated by the cars will not differ between choices. The cost figures related to each of the choices are presented below. The cost of capital is 8 %.
The Capital Metro transit CMT is trying to decide between light rail cars manufactured by two different components. LR power ( LRP) cars cost more to buy initially,but they will wear out in six years. The revenue generated by the cars will not differ between choices. The cost figures related to each of the choices are presented below. The cost of capital is 8 %.
Q1. What is the net present cost of the LRP cars ?
hey are expected to last for 10 years. Des differ between choices. The cost figures re Year LRP DS 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 46 What is the Net Present Cost of th Solution
Computation of Net present cost of LRP cars :
Year Cost PVF@8% Present cost
0 $2,75,000 1.0000 $2,75,000
1 to 10 $10,000 6.7100 $67,100
Net present cost $3,42,100
