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Calculate the annual equivalent

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Reference no: EM131919232

Project A has an NPV of 200000. The project is financed by borrowing at 7%pa. The cost of capital for Project A is 0.08. 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.

Reference no: EM131919232

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