Business, 28.10.2020 17:10 kayleenprmartinez100

Calculate the Equivalent Uniform Annual Benefit (EUAB) for the cash flow below for interest rate of 10%

Answers: 1

Show answers

Answers

Answer from: reecedstceklein

The Equivalent Uniform Annual Benefit (EUAB) is 2,220.52.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.

The explanation to the answer is now given as follows:

Note: See the attached excel file for the calculation of the total present values of cash flow (in bold red color).

Equivalent Uniform Annual Benefit (EUAB) refers to an annual benefit or cash flow that is obtained by converting any cash flow to an equivalent uniform cash flow.

From the question, the diagram indicates that the amount of the annual cash flows from year 1 to year 80 is $2,000, except for years 10 and 40 which are 7,000 and 15,000 respectively (in bold blue color in the attached excel file).

Because of years 10 and 40 which are 7,000 and 15,000, we first calculate the present value of all the annual cash flows from year 1 to 80 (in bold red color in the attached excel file).

From the attached excel file, we have:

Total present value of cash flows = 22,205.19

The annuity factor is calculated using the annuity formula as follows:

Annuity factor = ((1-(1/(1 + r))^n)/r) …………… (1)

Where;

r = interest rate = 10%, or 0.10

n = number of years = 80

Substituting the values into equation (1), we have:

Annuity factor = ((1-(1/(1 + 0.10))^80) / 0.10)

Annuity factor = 9.9951181414995

Approximating to 2 decimal places, we have:

Annuity factor = 10.00

The Equivalent Uniform Annual Benefit (EUAB) can therefore now be calculate using the formula for calculating the Equivalent Uniform Annual Benefit (EUAB) as follows:

EUAB = Total present value of cash flows / Annuity factor ……………. (2)

Substituting the values into equation (2), we have:

EUAB = 22,205.19 / 10.00

EUAB = 2,220.52

Therefore, the Equivalent Uniform Annual Benefit (EUAB) is 2,220.52.

Answer from: Quest

tell me the question and i will be able to answer : )

Answer from: Quest

answer; engaging in effective public relations;

Another question on Business

Business, 21.06.2019 16:50

The bonds issued by the south foot bear a coupon rate of 7.5 percent, payable semiannually. the bonds mature in 6.5 years, sell at par, and have a $1,000 face value. what is the yield to maturity

Answers: 3

Answer

Business, 21.06.2019 21:00

The market for corn in country a is highly competitive. at the current market price of $5/bushel there is a shortage of 100,000 bushels of corn in this country. media reports claim that the price of corn will rise drastically in the near future. according to these reports, the neighboring country b had witnessed a similar situation recently. at the same price, the shortage in country b was also 100,000 bushels and eventually the equilibrium price in b went up to $10/bushel. both countries are known to have equal number of corn producers and the market supply of corn is identical at all prices. this, combined with the fact that consumers in the two countries also have similar tastes and preferences, led the media to conclude that the price of corn in country a would soon be as high as $10/bushel. the new equilibrium price turns out to be below $10/bushel, what inferences can be drawn?

Answers: 3

Answer

Business, 22.06.2019 05:50

1. all other things equal, according to the law of demand, when the price of a good falls, the demand for the good falls the demand for the good rises the quantity demanded of the good falls the quantity demanded of the good rises 2. when a market is in equilibrium, the quantity of the good that buyers are willing and able to buy exactly equals the quantity that sellers are willing and able to sell cannot be determined is less than the quantity that sellers are willing and able to sell is greater than the quantity that sellers are willing and able to sell 3. which of the following factors does not influence the demand for a good or service? consumer (buyer) income the price of related goods the number of sellers buyer expectations 4. when the number of sellers in a market increases, demand rises supply rises the price rises, all else equal the number of buyers falls

Answers: 1

Answer

Business, 22.06.2019 12:40

Alarge tank is filled to capacity with 500 gallons of pure water. brine containing 2 pounds of salt per gallon is pumped into the tank at a rate of 5 gal/min. the well-mixed solution is pumped out at the same rate. find the number a(t) of pounds of salt in the tank at time t.

Answers: 3

Answer

You know the right answer?

Calculate the Equivalent Uniform Annual Benefit (EUAB) for the cash flow below for interest rate of...

Questions