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Water: Economics

Policy & Guidance: Worksheet R

Interim Economic Guidance for Water Quality Standards

Private-Sector Development

Calculation of Total Annualized Project Costs

Capital Costs to be financed (Supplied by applicant) $________ (1)
Interest Rate for Financing (Expressed as a decimal) ________(i)
Time Period of Financing (Assume 10 years*) 10 years (n)
Annualization Factor** =


Annualized Capital Cost [Calculate: (1) x (2) ] $________ (3)
Annual Cost of Operation and Maintenance

(including but not limited to monitoring, inspection, permitting fees, waste disposal charges, repair, administration and replacement)***

$________ (4)

Total Annual Cost of Pollution Control Project[ (3) + (4) ] $________ (5)

* While actual payback schedules may differ across projects and companies, assume equal annual payments over a 10-year period for consistency in comparing projects.

** Or see Appendix B for calculated annualization factors

*** For recurring costs that occur less frequently than once a year, pro rate the cost over the relevant number of years (e.g., for pumps replaced once every three years, include one-third of the cost in each year).

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