What is the equivalent annual worth of the following cash fl

What is the equivalent annual worth of the following cash flow? Using 6% interest rate. Enter the absolute value (positive value). First Cost Annual operating cost Salvage Value Life in years Value 6,000 400 1,000 10

Solution

Calculation of Equivalent Annual Worth

=Present value of Netbcash flow / PVAF,6%,10Years

=[6000+(400*7.36)-(1000*.5584)] / 7.36

=[6000+2944-558] / 7.36

=$1139.40