Calculator Inputs
Enter costs as positive numbers. The calculator internally treats initial cost as an investment outflow.
Plotly Graph
Example Data Table
| Scenario | Initial Cost ($) | Salvage ($) | Annual Benefit ($) | Annual O&M ($) | Rate (%) | Life (Years) |
|---|---|---|---|---|---|---|
| Warehouse Automation | 100,000 | 15,000 | 28,000 | 6,000 | 10 | 8 |
| Solar Equipment Upgrade | 185,000 | 25,000 | 41,000 | 9,500 | 9 | 10 |
| Fleet Tracking System | 72,000 | 8,000 | 19,500 | 4,200 | 11 | 6 |
Formula Used
Equivalent Uniform Annual Worth:
EUAW = Annual Benefits + Extra Annual Flow - Annual O&M - Adjustments - Capital Recovery + Salvage Annual Equivalent
Capital Recovery:
CR = P × (A/P, i, n)
Salvage Annual Equivalent:
SAE = S × (A/F, i, n)
Annual Worth Factors:
(A/P, i, n) = i(1+i)n / [(1+i)n - 1]
(A/F, i, n) = i / [(1+i)n - 1]
Here, P is present cost, S is salvage value, i is the annual discount rate, and n is project life in years.
How to Use This Calculator
- Enter the full initial investment amount.
- Provide the expected salvage value at project end.
- Set project life and discount rate carefully.
- Add annual benefits from savings or revenues.
- Enter annual operating, maintenance, and adjustment costs.
- Submit the form to view annual worth.
- Review the graph, KPIs, and discounted schedule.
- Download CSV or PDF for reporting needs.
Why Equivalent Uniform Annual Worth Matters
Equivalent uniform annual worth converts a project's full value into a consistent yearly amount. This makes different project lives easier to compare. It is especially useful when two investments have unequal durations, different maintenance profiles, or different salvage values.
A positive annual worth suggests the project earns above the required return. A larger positive value usually signals the better alternative when comparing independent options using the same assumptions.
FAQs
1. What does equivalent uniform annual worth mean?
It is the constant yearly value of a project's economic performance. It converts costs, benefits, and salvage into one annual figure for easier comparison.
2. When should I use EUAW instead of present worth?
Use EUAW when alternatives have unequal service lives. Annualizing project value makes yearly comparisons more direct and often more practical for budgeting.
3. What does a positive EUAW indicate?
A positive EUAW means the project delivers annual economic value above the required rate of return. It usually supports acceptance.
4. Why is salvage value added back?
Salvage value reduces the effective ownership cost. The calculator converts that future amount into an equivalent annual contribution using the sinking fund factor.
5. How does the discount rate affect results?
A higher discount rate increases capital recovery pressure and lowers the current value of future gains. That often reduces EUAW.
6. Can I include tax or risk adjustments?
Yes. Enter them as annual adjustments. Positive entries are treated as annual burdens, helping you build more conservative project evaluations.
7. Is this calculator useful for replacement decisions?
Yes. It helps compare keeping an existing asset versus replacing it. Annual worth highlights which option provides stronger yearly economics.
8. Can I export the results for reports?
Yes. Use the CSV button for spreadsheet analysis and the PDF button for quick reporting or documentation.