Assume that Project A has the cash flows listed below and a relevant cost of capital of 13 percent. Based on this data, determine the net present value (NPV) of this project using the equivalent annual annuity (EAA) approach and assuming infinite replication. Year 0 1 2 3 4 5 O $2.905.70 O $4,967.16 $2,063.33 $3.865.27 $6,244.42 Project A Cash Flow $8,000.00 0.00 0.00 $ $ $ $ 0.00 0.00 $20,000.00
Assume that Project A has the cash flows listed below and a relevant cost of capital of 13 percent. Based on this data, determine the net present value (NPV) of this project using the equivalent annual annuity (EAA) approach and assuming infinite replication. Year 0 1 2 3 4 5 O $2.905.70 O $4,967.16 $2,063.33 $3.865.27 $6,244.42 Project A Cash Flow $8,000.00 0.00 0.00 $ $ $ $ 0.00 0.00 $20,000.00
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 4BE: Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of...
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