Consumer durable model A is £1500.
It lasts 4 years
Maintenance £200 for the first 2 years, £250 for the third year, and £400 for the fourth (assumed payable at the end of the year).
At the end sell it for £500.
Model B is £1400 but I can get a discount of 10%
£250 per year Maintenance for each of the 4 years that it lasts (again paid at the end of the year),
l have to pay the council £50 to take it away.
Using present value methods, and assuming a discount rate of 15%, which of the two models would you recommend me to buy?
Does anyone have any idea how to calculate this and if so could you point me in the right direction at least please. Thanks