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A contractor purchased an excavator for $100,000. The life expectancy is 10-years. With the annual interest rate at 7%, the annual cost for the excavator is most nearly:
Solution: Equivalent Uniform Annual Cost
(EUAC) = P (A/P, i, n)
= 100,000(A/P, 7%, 10)
= $14,200
Derivation of Moment-Area Method
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