Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:A five-year project has an initial fixed asset investment of $320,000, an initial NWC
investment of $32,000, and an annual OCF of -$31,000. The fixed asset is fully
depreciated over the life of the project and has no salvage value. If the required return is
10 percent, what is this project's equivalent annual cost, or EAC? (A negative
answer should be indicated by a minus sign. Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
Equivalent annual cost
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