Beginning Finance MC Question:

plz make table & show ur work!! thx

Question 2 (10 points) The city of Middleville is considering offering public bus service. Setting up the service will cost the city $11M (where M stands for million). The useful life of the buses is 27 years. Annual maintenance of the buses would cost $86,000 per year and they would need a major overhaul in year 21 that will cost a total of $560,000. This overhaul is in addition to the annual maintenance Annual labor and administrative costs will begin at $120,000 in year 1 and grow at 2.5% per year thereafter. The buses will generate a revenue of $170,000 in year 1 and it will grow at 45% per year thereafter. Reduced parking requirements and other benefits generated by the project will save the city $270,000 per year. The salvage value (price the city can get in the future after maintenance) of the used buses in year 27 is expected to be $290,000 What is the NPV of the bus proposal? The city does not pay taxes and the discount rate is 5.9% Assume that all cash flows except initial investments happen at the end of the year and you are strongly encouraged to use a spreadsheet to solve this problem. $3,015,205.03 $2,785,491.52 $2,896,759 04 $2,847,180.43