Maintenance costs for a new piece of mining equipment are expected to be $20,000 in the first year, rising by $2,500 per year thereafter. The machine has an expected life of 10 years and interest is 5% annually. To evaluate bids from outside firms for a maintenance contract you need to know the present value of these costs. 

What is this value?

Answer rating: 100% (QA)

To calculate the present value of the maintenance costs for the new mining equipment we can use the ... View the full answer