Assuming infinite replication and a cost of capital of 10.5 percent, determine the net present value of this project using the Equivalent Annual Annuity approach. Year Cash Flow O ($5,000.00) $2,000.00 $1.600.00 $1,400.00 4 $1,200.00 5 $1,000.00 1 $1,250 $1,450 $1,066

Assuming infinite replication and a cost of capital of 10.5 percent, determine the net present value of this project using the Equivalent Annual Annuity approach. Year Cash Flow O ($5,000.00) $2,000.00 $1.600.00 $1,400.00 4 $1,200.00 5 $1,000.00 1 $1,250 $1,450 $1,066

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

Problem 1PS

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Question

100%

Assuming infinite replication and a cost of capital of 10.5 percent, determine the nel present value
of this project using the Equivalent Annual Annuity approach.
Year Cash Flow
0
($5,000.00)
$2,000.00
2 $1.600.00
$1,400.00
$1,200.00
$1,000.00
3
Ⓒ$1,250
$1,450
$896
O $1.066

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