Compute an equivalent annual cost over a single 5 year maint

Compute an equivalent annual cost over a single 5 year maintenance cycle. MARR is 10% per year compounded annually.

End of Year	Maintenance cost
1	20 million
2	30 million
3	30 million
4	30 million
5	80 million

Solution

End of Year Maintenance cost in million $ PVIF at 10% PV at 10% 1 20 0.90909 $           18.18 million $ 2 30 0.82645 $           24.79 million $ 3 30 0.75131 $           22.54 million $ 4 30 0.68301 $           20.49 million $ 5 80 0.62092 $           49.67 million $ 3.79079 $         135.68 million $ Equivalent annual cost = 135.68/3.79079 = $           35.79 million $