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the maintenance expenditures for a piece of equiptment that will be in use for 15 years will be 1000 in year five, 2000 in year 10, and 3500 in year 15. what is the uniform annual equivalent maintenance expense if the marr is 9 percent

Respuesta :

If the marr is 9%, the uniform annual equivalent maintenance cost is -305

Rate = 9%

First Calculate the Present worth

Presnt worth = Expense in 5 years(P/F, 9%, 5)  + Expense in 10 years(P/F, 9%, 10) + Expense in 15years(P/F, 9%, 10)

                = 1000*(0.6499) + 2000x(0.4224) + 3500(0..2745)

               = 2455.63

Uniform expense = Presnt worth x (A/P, 9% 15) =  2455.63 x 0.1241 = 304.665 ( close to 305)

The yearly cost of owning, running, and maintaining an asset throughout the course of its life is known as the equivalent annual cost, or EAC. EAC is frequently used by businesses to make capital budgeting choices since it enables them to evaluate the cost-effectiveness of different assets with different lifespans.

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