At 4% APR, figure operating costs for your products to be 4% of the purchasing costs per annum, increasing 10% each year for the product 1, 6% (+10% more per year) for product 2, and 10% (+10% per year increase) for product 3.
Product 1 cost $19,000 and has a life expectancy of 15 years
Product 2 cost $19,000 and has a life expectancy of 15 years
Product 3 cost $19,000 and has a life expectancy of 15 years
What are the operating costs of each product?
What is the PV of the operating costs for each product?
Which unit has the best PV considering purchase and operating costs?