Geoffrey wants to purchase a new car worth Kshs 500,000. As per estimates, the annual expense towards maintenance & repair will be Kshs 40,000, and fuel consumption per year will be another Kshs. 65,000.
Required
Calculate the life cycle cost of the car if he is planning to sell it after 5 years at a residual value of Kshs 250,000. Consider the applicable interest rate to be 8% and
PVIF 5, 8%=0.6806
PVAF 5, 8%=3.9927