Final answer:
The Equivalent Uniform Annual Benefit (EUAB) is calculated by discounting future cash flows to their present value using a given interest rate and then converting this total present value into an annual series using the annuity factor for the interest rate over the specified period. Without specific cash flow values, we can't compute the exact EUAB but we can explain the general methodology for doing so.
Step-by-step explanation:
To compute the Equivalent Uniform Annual Benefit (EUAB) for a series of cash flows with an interest rate of 5%, one must first understand the process of discounting future cash flows to their present value. This involves applying a formula that takes into account the time period and the given interest rate to determine what current value a future amount is equivalent to.
Without the specific cash flows provided in the question, we can't compute the exact EUAB. However, we can explain the general approach. The process typically involves identifying each cash flow amount and its corresponding time period, then calculating the present value (PV) of each using the formula from Table C1. With this information, you calculate the EUAB using the present value of an annuity factor for the given interest rate and number of periods.
As an example, if a project provides benefits of $1,000 at the end of each year for 5 years, and the interest rate is 5%, the present value of each of these cash flows would be calculated using the formula PV = Future Cash Flow / (1 + interest rate)^time period. After computing the PVs, add them up to get the total PV of all future benefits. Finally, this total PV is converted into an annual series using the annuity factor for a 5% interest rate over the given period.