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.