In: Economics
Year | Cash Outflow | P.V @ 8% | P.V factor | P.V of Cash Outflow(Cash Outflow*P.V Factor) |
0 | $ 25,000 | 1 | 1 | $ 25,000.00 |
1 | $ 500 | 1/(1+0.08)^1 | 0.925925926 | $ 462.96 |
2 | $ 500 | 1/(1+0.08)^2 | 0.85733882 | $ 428.67 |
3 | $ 500 | 1/(1+0.08)^3 | 0.793832241 | $ 396.92 |
4 | $ 500 | 1/(1+0.08)^4 | 0.735029853 | $ 367.51 |
5 | $ 500 | 1/(1+0.08)^5 | 0.680583197 | $ 340.29 |
6 | $ 750 | 1/(1+0.08)^6 | 0.630169627 | $ 472.63 |
7 | $ 750 | 1/(1+0.08)^7 | 0.583490395 | $ 437.62 |
8 | $ 750 | 1/(1+0.08)^8 | 0.540268885 | $ 405.20 |
9 | $ 750 | 1/(1+0.08)^9 | 0.500248967 | $ 375.19 |
10 | $ 750 | 1/(1+0.08)^10 | 0.463193488 | $ 347.40 |
$ 29,034.38 | ||||
The present worth of the total cost is $29034.38. |
Annual Maintenance Cost=N.P.V/No. of Years
=$4034/10=$403.40