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A project with a life of 11 has an initial fixed asset investment of $12,180, an initial NWC investment of $1,160, and an annual OCF of -$18,560. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 15 percent, what is the project's equivalent annual cost, or EAC? Multiple Choice $-20,008.16 $-22,114.28 $-17,902.04 O $-10,020.76 O $-21,061.22

A project with a life of 11 has an initial fixed asset investment of $12,180, an initial NWC investment of $1,160, and an annual OCF of -$18,560. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 15 percent, what is the project's equivalent annual cost, or EAC? Multiple Choice $-20,008.16 $-22,114.28 $-17,902.04 O $-10,020.76 O $-21,061.22

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A project with a life of 11 has an initial fixed asset investment of $12,180, an initial NWC investment of $1,160, and an annual OCF of -$18,560. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 15 percent, what is the project's equivalent annual cost, or EAC? Multiple Choice $-20,008.16 $-22,114.28 $-17,902.04 O $-10,020.76 O $-21,061.22
Transcribed Image Text:A project with a life of 11 has an initial fixed asset investment of $12,180, an initial NWC investment of $1,160, and an annual OCF of -$18,560. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 15 percent, what is the project's equivalent annual cost, or EAC? Multiple Choice $-20,008.16 $-22,114.28 $-17,902.04 O $-10,020.76 O $-21,061.22
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