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Steps on Calculating Uniform Annual Cost

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.

A) $2,896,471
B) $2,282,735
C) $2,891,003
D) $2,854,251

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Solution Preview

Step 1. First we need check the factors table in the textbook with 5 year project.

5 Year Project
End-Year Factors
Project Constant Dollars Current ...

Solution Summary

The solution gives detailed steps on calculating uniform annual cost using constant dollars and end-of-year factors.