Question: Answer Both 5a and b, Thank you so much 5a. Chief Derek Miller of the Harriston police depatment has submitted a peoposal to the city's
Answer Both 5a and b, Thank you so much
5a. Chief Derek Miller of the Harriston police depatment has submitted a peoposal to the city's budget director of Harriston reuqesting the purchase of ten new police cars. He estimates the department will save $20,000.00 a year by having the new cars. The cars will cost the city $200,000.00 a year by having the new cars. The cars will cost the city $200,000.00 Unfortantely, the life span of a police car is only four years at best. Using an 8% discount rate, Calculate the net present value of the proposal. Explain the results
b. Using the above example, Calculate the NPV usng the following data:Discount Rate=5%, Cost of Cars+$185,000.00, Annual Savings= $90,000.00. Life span of car=5 years, Explain the results
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