A 5-year project has an initial fixed asset investment of $622,600, an initial net working capital investment of $14,900, and an annual operating cash flow of -$51,480. The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 13.8 percent. What is the project's equivalent annual cost, or EAC? Group of answer choices -$242,421.87 -$214,775.43 -$234,867.92 -$234,018.4 -$239,561.53

A 5-year project has an initial fixed asset investment of $622,600, an initial net working capital investment of $14,900, and an annual operating cash flow of -$51,480. The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 13.8 percent. What is the project's equivalent annual cost, or EAC? Group of answer choices -$242,421.87 -$214,775.43 -$234,867.92 -$234,018.4 -$239,561.53

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 1P

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