Equipment Equivalent Annual Cost Comparison
Compare two unequal-life equipment choices using discounted acquisition, running cost and salvage value.
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Result
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Calculation steps
Work through one step at a time or reveal the complete calculation. The steps use your current inputs.
How to calculate
Calculate present cost of purchase and constant annual running costs, subtract discounted salvage, then divide by the annuity present-value factor for each life.
PV cost=upfront+annual cost×annuityPV−salvage/(1+r)^N; equivalent annual cost=PV cost/annuityPV
Worked example
At zero discount, upfront 1000, annual running cost 100, five-year life and salvage 0 give total cost 1500 and equivalent annual cost 300.
Assumptions and input details
1–100 whole life years. Costs are entered assumptions; no tax depreciation, financing or changing maintenance is inferred. Comparing annual equivalents across different lives assumes equal service and repeatable replacement cycles. A negative annual equivalent indicates net salvage credit under the inputs, not guaranteed profit or an instruction to buy. No live market data or national tax rules are inferred. Enter consistent amounts in one currency unless explicitly stated otherwise.
References: MIT: equivalent uniform annual cost
Using this calculator
Can I enter my own problem?
Yes. Replace the example values with your own inputs. The result, calculation steps, tables and applicable diagrams update from those inputs. Blank or invalid values clear the result; example values are never silently substituted for missing inputs.
Are the results exact?
Results use floating-point arithmetic and displayed rounding. Read the formula, assumptions and any stated data precision before interpreting the result.
Is my input uploaded?
The calculation runs in your browser. No account, file upload or external AI service is required. Inputs are not saved between page reloads.
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