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

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

$capital * (1+0.045)^{28} = 48,613.24$

now clearing the formula to solve for capital we got:

$capital = \frac{48,613.24}{(1+0.045)^{28}}$

and we reach the answer investment = $14,174.20

Answer from: Quest

How is this a question and how u need an answer for this

Another question on Business

Business, 21.06.2019 22:00

How would you cite different books by the same author on the works cited page? a. moore, jack h. folk songs and ballads. salem: poetry press, 1999. print. moore, jack h. ballads in poetry – a critical review. dallas: garden books, 1962. print. b. moore, jack h. folk songs and ballads. salem: poetry press, 1999. print. –––. ballads in poetry – a critical review. dallas: garden books, 1962. print. c. moore, jack h. ballads in poetry – a critical review. dallas: garden books, 1962. print. moore, jack h. folk songs and ballads. salem: poetry press, 1999. print. d. moore, jack h. ballads in poetry – a critical review. dallas: garden books, 1962. print. –––. folk songs and ballads. salem: poetry press, 1999. print.

Answers: 1

Answer

Business, 22.06.2019 11:00

The following information is available for ellen's fashions, inc. for the current month. book balance end of month $ 7 comma 000 outstanding checks 700 deposits in transit 4 comma 500 service charges 120 interest revenue 45 what is the adjusted book balance on the bank reconciliation?

Answers: 2

Answer

Business, 22.06.2019 17:30

Danielle enjoys working as a certified public accountant (cpa) and assisting small businesses and individuals with managing their finances and taxes. which general area of accounting is her specialty? danielle specialized in

Answers: 1

Answer

Business, 22.06.2019 22:50

For 2016, gourmet kitchen products reported $22 million of sales and $19 million of operating costs (including depreciation). the company has $15 million of total invested capital. its after-tax cost of capital is 10%, and its federal-plus-state income tax rate was 36%. what was the firm’s economic value added (eva), that is, how much value did management add to stockholders’ wealth during 2016?

Answers: 1

Answer

You know the right answer?

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

Questions