An alternative has a discounted project cost of $12,345,000 with a discounted salvage value of $1,750,000. The estimate was in constant dollars and the discounting used end-of-year factors. While the period of analysis is 5 years, the alternative only provides benefits for the last 4 years. Calculate the uniform annual cost.
Step 1. First we need check the factors table in the textbook with 5 year project.
5 Year Project
Project Constant Dollars Current ...
The solution gives detailed steps on calculating uniform annual cost using constant dollars and end-of-year factors.