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Calculating the present worth of an item

Calculating the present worth of an item

Calculating the present worth of an item

(OP)
I am studying to take the PE examination and it has been MANY years since I went to school.  I purchase one of the study guides from the ncees and there is a question on calculating the present worth of an investment.  

Can someone help me understand the question and answer?
Thank you in advance.

The question and answer are as follows:

A computing system costing $50,000 is installed initially.  A second computer is installed 2 years later at a cost of $50,000.  Each unit requires a maintenance cost of $10,000/year of operation.
The computers have zero salvage.
Assume a 10% rate of return and a 10% interest rate.
What is the present worth of the investment and maintenance cost for the first 4 years?

The answer is
PW = 50,000[1+ (p/f)10%,2] + 20,000(p/a)10%,4 -10,000(p/a)10%,2 = 137,365

Could some break down step by step in detail the answer to this problem.  Please identify each component in simple terms

RE: Calculating the present worth of an item

1. Present Worth is also known as Net Present Value (NPV).
2. Look up NPV in Excel Help.
3. Look up NPV on Google.

HAZOP at www.curryhydrocarbons.ca

RE: Calculating the present worth of an item

The total 4-year out of pocket expense is $160K for installs and maintenance.  Discounted at 10%, the present value of this expense is $137,365

  FV Actual Cost     PV Cost
Y0   = 50,000       50,000.00
Y1   = 10,000         9090.91
Y2   = 60,000       49,586.78
Y3   = 20,000       15,026.30
Y4   = 20,000       13,660.27
Total 160,000      137,364.25

PV = FV/(1+rate)^year

PV = 50,000 + FV1/(1+.1)^1 + FV2/(1+.1)^2 +...+ FVn/(1+rate)^year

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