2) A company makes an investment in a new delivery van costing $47,000 and is expected to have a service life of 200,000 miles at an annual usage of 40,00 miles per year. The delivery service is expect to generate the following profits:

$15K, in odd years and, - $20K, in even years, and the project is evaluated at a rate of 6%,

1. What is the present value of this investment?
2. What is the annual equivalent?

n In Out

0 30000

1 40000 15000

2 40000 15000

3 40000 15000

4 40000 15000

5 40000+3000 What is the Present value of the cash flow above