## Equivalent Annual Cost Calculator

The Equivalent Annual Cost (EAC) calculator is a financial tool used to compare and evaluate different investment options or projects by converting their costs or cash flows into equal annual amounts.

### Formula

The formula for calculating the EAC is as follows:

**EAC = NPV * (r / (1 – (1 + r)^(-n)))**

In this formula, NPV represents the net present value of the project’s cash flows, r represents the discount rate or the required rate of return, and n represents the project’s duration or number of years.

### Example

Let’s say we have a project with a net present value of $10,000, a discount rate of 8%, and a project duration of 5 years. Using the formula, the EAC would be:

EAC = $10,000 * (0.08 / (1 – (1 + 0.08)^(-5)))