Problema 4-year project has an initial asset investment of, Ask an Expert

Accounting

Problem:

A 4-year project has an initial asset investment of $306,600, and initial net working capital investment of $29,200, and an annual operating cash flow of -$46,720. 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 15 percent.

Required:

Question: What is the project's equivalent annual cost, or EAC?

-$158,491
-$152,309
-$147,884
-$145,509
-$142,212

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173636

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