(Answered) Project a has an npv of 100000 the project is financed by

Management Studies

Project A has an NPV of 100000. The project is financed by borrowing at 7%pa. The cost of capital for Project A is 0.09. This rate is expressed as a decimal, e.g. so that .12 is equal to 12%. The project has 7 year life. Calculate the Annual Equivalent (AE). Your textbook calls this EAV, Equivalent Annual Value. Calculate to the nearest dollar.

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