The Pentagon asked a defense contractor to estimate the life-cycle cost for a proposed light-duty support vehicle. The list of items included the following categories: R&D costs (R&D), nonrecurring investment costs (NRI), recurring upgrade costs (RU), scheduled and unscheduled maintenance costs (Maint), equipment usage costs (Equip), and phaseout_disposal costs (Po_D). Use the cost estimates (shown in $1 million) for the 20-year life cycle to calculate the annual LCC at an interest rate of 7% per year.
|
Year
|
R&D
|
NRI
|
RU
|
Maint
|
Equip
|
PoD
|
|
0
|
5.5
|
1.1
|
|
|
|
|
|
1
|
3.5
|
|
|
|
|
|
|
2
|
2.5
|
|
|
|
|
|
|
3
|
0.5
|
5
|
1
|
0.6
|
1.5
|
|
|
4
|
|
11
|
3
|
1.4
|
3.6
|
|
|
5
|
|
10.5
|
4.2
|
1.6
|
5.3
|
|
|
6-10
|
|
|
$7
|
2.7
|
7.8
|
|
|
11 on
|
|
|
2
|
3.5
|
8.5
|
|
|
18-20
|
|
|
|
|
|
2.7
|
