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1 ) You want to purchase a new car worth $ 2 0 , 0 0 0 . Calculate the car s life cycle cost
You want to purchase a new car worth $ Calculate the cars life cycle cost if your plan to
sell the car after five years at a residual value of $ As per estimates, the annual expense
for maintenance & repair will be $ and gas consumption per year will be another $
Please consider the applicable interest rate to be
Required:
Determine LCC
Assignment :
Company XYZ differentiates between two machines A and B The two machines are
designed differently but have identical capacity.
Machine A costs $ and will last for years. It costs $ per year to run.
Machine B is an economy model costing only $ but will last only for
years, and costs $ per year to run.
These are real cash flows.
The costs are forecasted in Dollars of constant purchasing power. Ignore tax.
Opportunity cost of capital is
Which machine Company X should buy?
A B
Cost of purchase $ $
running cost $ $
Useful Life
Opportunity cost of capital
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