Question
Determine the total present sum of money needed to finance and maintain a small transit system given the following details. Take your analysis period to
Determine the total present sum of money needed to finance and maintain a small transit system given the following details. Take your analysis period to be 10 years and an interest rate of 10%. Assume a salvage value of $1,000,000 for Buses that are 3 years old. Assume no salvage value for anything else. Initial cost of Buses: $2,150,000, Annual Maintenance cost of Buses: $80,000, Life of Buses: 7 years Initial cost of Shelters: $1,500,000, Annual Maintenance cost of Shelters: $40,000, Life of Shelters: 10 years Initial cost of Small Equipment: $38,000, Annual Maintenance cost of Small Equipment: $13,000, Life of Small Equipment: 5 years
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