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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Transcribed Image Text:A five-year project has an initial fixed asset investment of $300,000, an initial NWC investment of $28,000, and an annual OCF of -
$27,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 11%, what is
this project's equivalent annual cost, or EAC? (Negative answer should be indicated by a minus sign. Do not round your
intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Equivalent annual cost
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