document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1147861>Question 1147861</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A printing machine costs 400,000 to purchase with a life of 10years with no salvage value. If the rate of interest is 10% per annum, compounded annually, compute the equivalent uniform annual cost of the machine If it will cost<BR>\n" );
document.write( " P100,000 per year to operate?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #769365 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=769365\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> i get the equivalent uniform annual cost of the machine is equal to $165,098.16.<BR>\n" );
document.write( "the equivalent annual cost for the machine itself is $65,098.16.<BR>\n" );
document.write( "this is found using the annuity from a present amount with end of time period payments formula, or using a financial calculator to find the equivalent annual cost.<BR>\n" );
document.write( "add the $100,000 annual cost for operation of the machine and you get a total equivalent annual cost of $165,098.16.<BR>\n" );
document.write( "the annuity from a present amount formula is:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "a = (p*r)/(1-(1/(1+r)^n))<BR>\n" );
document.write( "a is the annuity.<BR>\n" );
document.write( "p is the present amount.<BR>\n" );
document.write( "r is the interest rate per time period.<BR>\n" );
document.write( "n is the number of time periods.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "the formula becomes:<BR>\n" );
document.write( "a = (400000*.10)/(1-(1/(1+.10)^10))<BR>\n" );
document.write( "the result is a = 65,098.16 rounded to the nearest penny.<BR>\n" );
document.write( "add 100,000 to that and you get an equivalent annual cost of 165,098.16\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "i think that's what you're looking for.<BR>\n" );
document.write( "i did a cash flow analysis in excel and got the same answer.<BR>\n" );
document.write( "the answer appears to be correct if my assumptions are correct.<BR>\n" );
document.write( "my assumptions are the equivalent annual cost is the equivalent annual cost of the 400,000 paid for the machine plus the annual operating costs.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );