Hello, I am looking for help in figuring out how to calculate the Warranty cost over 20 years while building inflation into the warranty. The numbers are as follows:

Average warranty cost per year per bus for the first five years is $1,000. The present value of this cost will be used as a cost figure for each bus.

Bus warranty $1,000/year for 5 years

Engine warranty: $500/ year for 5 years

Number of busses: 11,000

Avg. Inflation rate is 3% per year.

How would this look over 20 years, building inflation into the warranty?

Sorry, WACC is 8.09%