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