Question: Consider an asset which has no initial cost but for which there is an expenditure of $5,000 at the end of the first year. The

Consider an asset which has no initial cost but for which

Consider an asset which has no initial cost but for which there is an expenditure of $5,000 at the end of the first year. The net cost at the end of year 2 is $10,000. With an interest rate of 6%, what is a levelized cost payment payable at the end of years 1 and 2, which has the same present value as the actual cost stream at the end of period 0. The annuity factor with an interest rate of 6% and two payments is given 1- (1.06)2 (1+i)" = 1.833. by .06

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