1.6 - Calculating Equivalent Annual Cost for Year 2
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Practice Questions
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What does EAC stand for?
💡 Hint: It's an acronym used in project management.
If the purchase price is Rs. 4,000,000 and the USCRF is 0.5, what is the EAC?
💡 Hint: Multiply the purchase price by the uniform series capital recovery factor.
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Interactive Quizzes
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What does EAC stand for?
💡 Hint: Think about the term that speaks about projects' yearly cost.
True or False: The USCRF is used to calculate future costs.
💡 Hint: Reflect on whether it applies to future or current costs.
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Challenge Problems
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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.
💡 Hint: Carefully include all variables during your calculations.
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?
💡 Hint: Keep track of how each component impacts the overall total.
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