Question
Project A has an NPV of 200000. The project is financed by borrowing at 7%pa. The cost of capital for Project A is 0.09. This
Project A has an NPV of 200000. 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 5 year life. Calculate the Annual Equivalent (AE). Your textbook calls this EAV, Equivalent Annual Value. Calculate to the nearest dollar.
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Multinational Finance
Authors: Kirt C. Butler
3rd Edition
0324177453, 978-0324177459
