WITH DETAILED STEPS PLEASE
A start-up company makes e-bikes that can be purchased for $7,000 each. The e-bike is estimated to have a life of 12 years with annual distance travel of 1,100 km. Every three years, a new set of batteries will have to be purchased at a cost of $750 and the trade in value of $125. Annual maintenance of each e-bike is estimated to cost $80. The cost of recharging the battery is estimated $0.005 per kilometer. The salvage value of the e-bike and its battery is estimated at $1250 at the end of year 12.
Suppose MARR is 5%. Calculate
a) Capital cost
b) Annual battery replacement cost
c) Annual recharging cost
d) Total annual cost
e) Cost per kilometre to own and operate each e-bike.