To determine the most beneficial bus, we need to calculate the present worth of total costs for all three

buses at 7% discount rate.

You can use compounding interest table to get the values of P/A and P/F.
PW of costs for Super bus (7%) = $325,000 + ($52,300)*(P/A, 7%, 25) + $28,000*(P/F, 7%,6) + $28,000*(P/F, 7%,12) + $28,000*(P/F,
7%,18)
=> $325,000 + ($52,300* 11.654) + ($28,000*0.6663) + ($28,000*0.4440) + ($28,000*0.2959) = $973,877.80
Annualized Cost = $973,877.80 / 25 = $38,955.11
PW of costs for Standard bus (7%) = $225,000 + [($30,000)*(P/A, 7%, 10) + $45,000*(P/F, 7%, 6)
=> $225,000 + ($30,000*7.024) + ($45,000*0.6663) = $465,703.5
Annualized Cost = $465,703.5 / 10 = $46,570.35
PW of costs for Rebuild (7%) = $95,000 + ($42,000)*(P/A, 7%, 5)
=> $95,000 + ($42,000*4.100) = $267,200
Annualized Cost = $267,200/ 5 = $53,440
As we can see in the above calculations, Annualized cost for Super bus is the lowest, it is most preferred.