Consider an asset with upfront cost of $10,358.

The cost associated with it during the first year of operation is $7,008.

The cost associated with it during the second year of operation is $14,375.

With an interest rate of 0.10, what is a levelized cost payment payable at the end of years 1 and 2, which has the same present value as the actual cost stream at the end of period 0.

The annuity formula for an interest rate of 0.10