The Capital Metro Transit ( CMT ) is trying to decide between light rail cars manufactured by two different companies. LR Power ( LRP ) cars cost more to buy initially but they are expected to last for 10 years. Desire streetcar Inc ( DSI) cars are cheaper initially but they will wear out in six years. The revenue generated by the cars will not differ between choices. The cost related to each of the choices are presented below. The cost of capital is 8 %

Q 1: what is the annualized cost of the LRP cars ?

Year LRP DSI 0 $275,000 $195,000 1 $10,000 $15,000 2 $10,000 $15,000 3 $10,000 $15,000 4 $10,000 $15,000 5 $10,000 $15,000 6 $10,000 $15,000 7 $10,000 8 $10,000 9 $10,000 10 $10 000 iven this information answer questions 4