Calculate the present worth of cost

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A business buys a vehicle for $6,000, uses it for 5 years, and salvages it for $1,000. The annual cost of operating the vehicle was $900. Maintenance costs are $200 for the first year and increase at a 8% annual compounded rate. The business uses an interest rate of 8%. Determine the cash flow diagram and calculate the present worth of cost (salvage considered as reduction of cost).

Reference no: EM131044703

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