Project ABC

Initial End-of-Year

Investment Cash Flows for years 1-3, respectively

$33,000 $20,000

30,000

15,000

WACC = 13%

What is the NPV? (Please round to the nearest dollar and do not enter the dollar sign)

Smith Importers, an import company, is evaluating two mutually exclusive projects, A and B. The relevant cash flows for

each project are given in the table below. The cost of capital for use in evaluating each of these equally risky projects is 11

percent.

Project A Project B

Initial Investment $350,000 $425,000

Year Cash Inflows (CF)

1 $140,000 $175,000

2 165,000 150,000

3 190,000 125,000

4 100,000

5 75,000

6 50,000

The equivalent annual annuity (EAA) of Project A is what? (Round to the nearest cent and do not include the dollar sign