Fieldspring’s city manager of public works has been reviewing flood data for his city and has determined a certain pattern to the associated costs. He wishes to start a perpetual fund for floods. The fund will make available $150,000 each year plus $450,000 every third year. Assume that he wants the first $150,000 made available now and can get an interest rate of 6.5%. (a) What is the EUAC of this proposed fund? Suggestion: Consider the CFD shown on the right. Find the EUAC using the A’s and a A/F of the $450K of the 3rd year.
