Finding the project equivalent annual cost

Assignment Help Finance Basics
Reference no: EM131928646

Question: A 6-year project has an initial fixed asset investment of $15,960, an initial NWC investment of $1,520, and an annual OCF of -$24,320. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the required return is 11 percent, what is the project's equivalent annual cost, or EAC?

Reference no: EM131928646

Questions Cloud

What price does the investor pay for entire loan : What price does the investor pay for the entire loan?
What is the dollar value for the bond : There is a 6.4 percent coupon bond with six years to maturity and a current price of $1,066.70. What is the dollar value of an 01 for the bond?
What is the current value-price : A 6.55% coupon rate bond makes annual interest rate payments. Par value is $1,000. The bond matures in 12 years. The required rate of return is 7.55%.
Which country has the highest country risk premium why : What is the implication of this data, i.e. which country has the highest default rate, and which country has the highest country risk premium? Why
Finding the project equivalent annual cost : A 6-year project has an initial fixed asset investment of $15,960, an initial NWC investment of $1,520, and an annual OCF of -$24,320.
Discuss the estate planning strategies : The Grantor, age 70, is interested in removing an income-producing asset with significant appreciation potential from her estate.
What is the current price : what is the current price (Po)? What will the price be in 3 (P3) years? In 15 years (P15)?
What is the yield to call of the bond : A 6.00 percent coupon bond with 17 years left to maturity can be called in six years. The call premium is one year of coupon payments.
What would be the total return of the bond : A 6.30 percent coupon bond with 18 years left to maturity is priced to offer a 5.4 percent yield to maturity. You believe that in one year.

Reviews

Write a Review

Finance Basics Questions & Answers

  Conditions does the holder of the option make a profit

If the option is held to maturity under what conditions does the holder of the option make a profit? Note: ignore time value of money.

  Annual interest rate compounded monthly

How much interest is to be paid in the second year of a 6-year loan of $100,000 with payments occurring at the end of each month, and a 6% annual interest rate?

  Could an investor beat the stock market and generate a

could an investor beat the stock market and generate a superior return with companies that have formulated and

  Todd and cathy created a firm that is a separate legal

todd and cathy created a firm that is a separate legal entity and will share ownership of that firm on a 5050 basis.

  Is there a lesson to be learned from mikes experience

Comment on the ethics of banks and other financial institutions' efforts to notify customers of fee changes.- Is there a lesson to be learned from Mike's experience?

  Addressing different issues in technology service corps

Why are you interested in participating in Technology Service Corps (TSC) program? What do you enjoy most about technology? What are your favorite technologies/gadgets? How have they made a difference in your life? How do you see technology fittin..

  Explain how the average cost method is applied

Inventory valuation methods determine the cost of goods sold and the inventory balance. Explain how the Average Cost method is applied and provide an example of the application of this method.

  What is the standard deviation of the returns on a stock

What is the standard deviation of the returns on a stock given the following information?

  Cash flows estimation and capital budgeting

a. What is the initial cash outlay? b. What are the free cash flow for year 1?

  What are the companys most vulnerable areas

What are the companys most vulnerable areas

  Depreciation amount in the second year

Suppose that your company bought a product for $200,000 and put it in service in 2015. The product you bought will be depreciated with the GDS using half-year convention. The cost basis for the product is $200,000. If we assume that this product i..

  What is the most the firm can pay in cash dividends to each

What is the most the firm can pay in cash dividends to each common stockholder?(Assume that legal capital includes all paid-in capital.) What effect would a cash dividend of $0.80 per share have on the firm's balance sheet entries?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd