Suppose a project has a $1,298 cost outlay in Year 0, $1000 net opertating cash inflows...

Suppose a project has a $1,298 cost outlay in Year 0, $1000 net opertating cash inflows for Years 1 - 5, and a $1,500 non-operating cash flow in Year 5. Assuming an 15% cost of capital, what is the project's equivalent annual annuity?

Expert Solution

Solution :

The Project's Equivalent Annual Annuity = $ 835.26

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago

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