00:01
In this question, we are given the rally or cost increases at natural gas.
00:09
So current spend is $8 ,000 and the first cash flow is $5 ,800 ,000, starting for a year for 15 years.
00:33
Similarly, the cost of maintenance of gas furnace is current spend.
00:47
$345 and first cash flow is 396 .75.
00:59
So now we're going to calculate the present value of the operating and present value of operating and maintenance costs.
01:10
So the present value of the operating and maintenance cost will be present value of 8 ,000 will be 8 ,000 and present value of 5 ,000, 800 of this value for 15 years at 10 % increase will be 5 ,800 into 1 minus 1 .1, divide the 1 .18.
01:45
This is the annuity wage to the power 15.
01:48
This is 15 years, 0 .18, minus 0 .1 .1.
01:53
And present value of 345 will be 345 plus 396 .75 into 1 minus 1 .15.
02:05
This is the rate...