Problem:
A 4-year project has an initial fixed asset investment of $22,680, an initial NWC investment of $2,160, and an annual OCF of -$34,560. The fixed asset is fully depreciated over the life of the project and has no salvage value.
Required:
If the required return is 20 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.)
- $-45,940.69
- $-43,753.04
- $-37,190.08
- $-28,316.25
- $-41,565.39
Note: Please show how you came up with the solution.