Practice Calculating Equivalent Annual Cost For Year 2 (1.6) - Equivalent Annual Cost Calculation

Practice: Calculating Equivalent Annual Cost for Year 2

Lesson 1.6Equivalent Annual Cost Calculation

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10 questions

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6 sample questions

Question 1.
What does EAC stand for?
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It's an acronym used in project management.
Question 2.
If the purchase price is Rs. 4,000,000 and the USCRF is 0.5, what is the EAC?
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Multiply the purchase price by the uniform series capital recovery factor.
3Question 3.
What does EAC stand for?
- Equivalent Annual Cost
- Estimated Average Cost
- Equal Annual Contribution
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Think about the term that speaks about projects' yearly cost.
4Question 4.
True or False: The USCRF is used to calculate future costs.
- True
- False
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Reflect on whether it applies to future or current costs.
Question 5.
Given a purchase price of Rs. 5,000,000 and a USCRF of 0.3, calculate the EAC for Year Four. Now consider yearly operating costs of Rs. 600,000 with a constant salvage value of Rs. 100,000.
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Carefully include all variables during your calculations.
Question 6.
If the EAC for a purchase price is Rs. 3,000,000 and operating costs are Rs. 1,000,000, what would be the revised total if salvage value increases to Rs. 200,000?
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Keep track of how each component impacts the overall total.

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