B. Amortization Schedule Explanation
To standardize the allocation of capital costs for new marina equipment and facilities over their useful life time, an annualized value has been calculated for this report based on the commonly used number of years the item will last, and at an assumed interest rate of 5%. The average annualized cost (R), which is equivalent to a one-time cost (A), is calculated by:
IFPVA(n,r) is the Present Value Annuity Interest Factor for n years and an interest rate of r.
The formula for the interest factor is:
For this set of case studies, investments were assumed to last 5, 10, or 20 years, and with an interest rate assumed to be 5%.
The Interest Factors for these three ranges are:
| Years: | 5 | 10 | 20 |
| IFPVA(n,r) | 4.329 | 7.722 | 12.462 |
The interest factors were used in Table 3, Costs/Benefits of Clean Marina Examples, to calculate the numbers in column "annualized cost of investment"
Examples of years used for calculating amortized marina write off.
| 5 years: | Dustless sanders, Closed loop sand blaster |
| 10 years: | Pumpouts, Recycling equipment, Fuel pumps, Personal water craft fueling dock, Pressure wash equipment |
| 20 years: | Oil burner, Inground tanks, Permeable parking surface, Breakwaters |
|
|
|
|
http://www.epa.gov/owow/NPS/marinas/appxb.html
This page last updated October 4, 1999