Question
In: Economics
A company spends $120,000 on equipment. The annual benefit is $1,850. The company spends $13,000 and...
A company spends $120,000 on equipment. The annual benefit is $1,850. The company spends $13,000 and $16,500, at the end of 3 years and 5 years. And, lastly salvaged with $27,000 at the end of it's 8 year life. After 8 years the company wants to find EUAB over 8 years. How much is it?
Int. rate = 9%
Solutions
Expert Solution
EUAB : Equivalent Uniform Anuual Benefit
= Annual Benefit +[ Salvage value (A/F , i, t ) ]
Given ,
Annual Benefit = $ 1850
Salvaged Value = $ 27000
Life = 8 years
Intt Rate = 9%
EUAB = $ 1850 + [ 27000*( A/F, 9%, 8)]
= $1850 + ( 27000 * .0907)
= $1850 + 24489
= $ 26339
Hence , The Equivalent Uniform annual benefits is $ 26339
Rahul Sunny answered 2 years agoRelated Solutions
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