Calculate the project equivalent annual cost

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Reference no: EM132014673

Project X lasts for five years. X comes with initial fixed asset investment of $270,000, initial Net Working Capital of $25,000 that can be recovered at the end of the project. The annual OCF is estimated to be -$42,000. Assume the fixed asset will be depreciated to zero with no salvage value. Calculate the project’s equivalent annual cost (EAC) using 11 percent required rate of return.

Reference no: EM132014673

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