4-54 It is estimated that the maintenance cost on a new car will be $500 the...

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Question

Answer 1

Answer #1

Amount which need to be kept aside is $8609

Year	Cashflows	PVF @ 5%	Present values
1	-500	0.952381	-476.19
2	-650	0.907029	-589.569
3	-800	0.863838	-691.07
4	-950	0.822702	-781.567
5	-1100	0.783526	-861.879
6	-1250	0.746215	-932.769
7	-1400	0.710681	-994.954
8	-1550	0.676839	-1049.1
9	-1700	0.644609	-1095.84
10	-1850	0.613913	-1135.74
Present value			-8609

Answer 2

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