Description
At zero rate annualize purchase minus residual by lifetime; otherwise discount residual to present and apply the annuity capital-recovery factor, then divide by annualUses.
Health-economic costs depend on resource definitions, perspective, currency, price year, and timing. An incremental or discounted model term uses supplied assumptions without proving treatment benefit or determining an adoption decision.
At zero rate annualize purchase minus residual by lifetime; otherwise discount residual to present and apply the annuity capital-recovery factor, then divide by annualUses.
When to use this tool
Use Health Cost Capital Equipment Annuity Term when you need one transparent health-economic cost or comparison component.
How to use the tool and how it works
- Enter purchaseCost, residualValue, lifetimeYears, discountRate, annualUses. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read equivalentAnnualCost, capitalCostPerUse. Use the output convention below.
Require nonnegative purchaseCost and residualValue, positive integer lifetimeYears, positive annualUses, and discountRate above -1. At zero rate annualize purchase minus residual by lifetime; otherwise discount residual to present and apply the annuity capital-recovery factor, then divide by annualUses.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| purchaseCost | Purchase Cost | Required. Finite number; minimum 0. |
| residualValue | Residual Value | Required. Finite number; minimum 0. |
| lifetimeYears | Lifetime Years | Required. Safe integer; minimum 1. |
| discountRate | Annual discount rate as a fraction under the stated model. | Required. Finite number; strictly above -1. |
| annualUses | Annual Uses | Required. Finite number; strictly above 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| equivalentAnnualCost | Equivalent Annual Cost | Required. Finite number. |
| capitalCostPerUse | Capital Cost Per Use | Required. Finite number. |
{
"input": {
"purchaseCost": 10000,
"residualValue": 2000,
"lifetimeYears": 4,
"discountRate": 0,
"annualUses": 200
},
"output": {
"equivalentAnnualCost": 2000,
"capitalCostPerUse": 10
}
}Limitations and assumptions
- Residual value can exceed purchase cost and annual cost may be negative; service costs, taxes, financing, actual equipment life, and discount-policy suitability are not evaluated.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Review the complete economic evaluation, clinical evidence, uncertainty, and relevant decision context separately.
References
Similar or alternative tools
- Resource Use Unit Cost One Line Term
Multiply nonnegative units by signed unitCost for grossCost and by attributableFraction in [0, 1] for attributedCost.
- Discount Timing Half Cycle Factor
Use (index+0.5) years-of-cycle for midpoint or (index+1) for end timing and return the annual discount factor.