You are thinking about purchasing a new computer since the machine you are using now is four years old, slow, not always reliable, and does not support the latest operating system. Your needs for the new computer are simple: anti-virus software, email, web browsing, word processing, spreadsheet, database, iTunes, and some lightweight graphical tools. Your concern is what the total cost of ownership will be for the next three years. You will have to factor in a few added costs beyond just the initial purchase price for the computer itself, such as: added hardware (this could include a new printer, docking station, or scanner), software (purchase of a new operating system), training (you're thinking about pursuing web training to get an internship next term), subsequent software upgrades, and maintenance.

Discount Rate 1 0.9325 (year 1) 0.8109 (year 2) 0.7051(year 3)

Time 0 Year 1 Year 2 Year 3

Computer $1,000.00 $- $- $-

Software $2,000.00 $- $- $-

Additional Hardware

$800.00 $- $- $-

Training $800.00 $- $- $-

Software upgrades

$- $1,000.00 $1,000.00 $500.00

Maintenance $- $500.00 $600.00 $700.00

There should be an end column after Year 3 that says: Present Value Costs, but I couldn't get it to post there. I'm just basically not sure that I'm calculating the end column correctly. Can anyone tell me what they come up with or confirm the formula used? Thank you!