What is the equivalent present cost is for the first 5 years

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The council members of a small town have decided that the earthlevee that protects the town from a nearby river should be rebuiltand strengthened. The town engineer estimates that the costof the work at the end of the first year will be $85,000. Heestimates that in subsequent years the annual repair costs willdecline by $10,000, making the second-year cost $75,000; thethird-year $65,000, and so forth. The council members want toknow what the equivalent present cost is for the first 5 years of repair work if interest is 4%.

Reference no: EM13243481

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