A maintenance contract states that the annual maintenance cost is $5000 for the first 4 years and $8000 thereafter In addition, there is expected to be a recurring upgrade cost of $15000 every 13 years 1 Present all steps to determine the Capitalized Cost for an infinite sequence of cash flows 2 Present the numerical results associated with each step 3 Find i (the interest rate) for which the total capitalized cost of the contract will be equal to 287532 (explain in details your approach) Exercise 2 A maintenance contract states that the annual maintenance cost is $5000 for the first 4 years and $8000 thereafter In addition, there is expected to be a recurring upgrade cost of $15000 every 13 years 1 Present all steps to determine the Capitalized Cost for an infinite sequence of cash flows 2 Present the numerical results associated with each step 3 Find i (the interest rate) for which the total capitalized cost of the contract will be equal to 287532 (explain in details your approach)

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A maintenance contract states that the annual maintenance cost is $5000 for the first 4 years and $8000 thereafter. In addition, there is expected to

A maintenance contract states that the annual maintenance cost is $5000 for the first 4 years and $8000 thereafter. In addition, there is expected to be a recurring upgrade cost of $15000 every 13 years. 1- Present all steps to determine the Capitalized Cost for an infinite sequence of cash flows. 2- Present the numerical results associated with each step. 3- Find i (the interest rate) for which the total capitalized cost of the contract will be equal to -287532 (explain in details your approach). image text in transcribed

Exercise 2 A maintenance contract states that the annual maintenance cost is $5000 for the first 4 years and $8000 thereafter. In addition, there is expected to be a recurring upgrade cost of $15000 every 13 years. 1. Present all steps to determine the Capitalized Cost for an infinite sequence of cash flows. 2. Present the numerical results associated with each step. 3. Find i (the interest rate) for which the total capitalized cost of the contract will be equal to -287532 (explain in details your approach)