This is from a recent collision, but you'll get the gist: This what an AOR typically will look like after a single hit by a missile or torpedo:
https://www.youtube.com/watch?v=xsDOqabk5L4
And Chief, Chris Pook has the math right: It's 659 million if the government want to buy her right now and take her over.
Otherwise, it's 520 millions over 10 years going towards paying for her (with some interest rate in there somewhere) and 300 millions for the operation and the crew over the same 10 years. So 820 millions after ten years, or basically, 82 millions every year in the Navy O&M budget and after ten years, you can return her, no questions asked. Or, you can buy her any time along the way and some of the annual 52 millions dollars for the "rental" gets credited towards the construction cost of 659 millions.
For instance, let say that the rate of return is 3% for FFS (and I will use 660 millions vice 659 for ease of calculation), then, in the first year, , 19.8 millions of the 52 millions is interest and 32.2 millions is applied in reduction of the 659 million value. This leaves a value of 627 millions for the second year, so in that year, 18.8 millions are interest, and 33.2 millions are applied against the residual value, bringing it down to 593.8 millions, which is what Canada would have to pay if they want to acquire her after 2 years.
So you can see that, acquiring her after two years would cost the rental for two years, plus operations costs for two years plus residual value after two years: (2X52) + (2X30) + 593.8 = 757.8 millions.
Now, I have a calculator that does these types of calculations, and using 3% as FFS rate of return on investment (not a bad figures for these days), it tells me that, after 10 years, the residual value for the purchase of the iAOR would be 290 million dollars, give or take a few hundred grands. So if Canada was to acquire her at the end of the period, the total cost to taxpayers would be 1.110 Billion dollars, but that would include use and operations for the last ten years.
So three financial markers here: Outright acquisition right now: 659 Million $, but we then have to pay for her operation from now on; or 820 Million $ paid over ten years, but we have nothing left in hand though we did get use of the iAOR for ten years at no extra operating costs; or 1,110 Million $ and we get the use and operation for ten years and a 17 year old ship at the end of that period.