Engineering Board Exam Reviewer · Equivalent Uniform Annual Cost · medium
A facility costs P500,000, lasts 10 years, and has a salvage value of P100,000. Operating cost is P30,000 in year 1 and increases by P5,000 each year. Find the equivalent uniform annual cost at 10% interest.
- P123,725.46
- P105,098.16
- P93,725.46
- P219,554.87
Answer
A. P123,725.46
Solution
EUAC=CR+O1+G(A/G,i,n)=400,000(0.162745)+10,000+30,000+5,000(3.7255)=P123,725.46.
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