A 7-year project has an initial fixed asset investment of $16,380, an initial NWC investment of $1,560, and an annual OCF of -$24,960. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the required return is 8 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.)
a. $-23,996.30
b. $-20,997.25
c. $-29,642.49
d. $-26,819.40
e. $-28,230.95
Correct answer: e. $-28,230.95
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
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