Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 14. equivalent annual annuities another method to

14. Equivalent annual annuities Another method to deal with the unequal life problem of projects...

60.1K

Verified Solution

Question

Finance

image
14. Equivalent annual annuities Another method to deal with the unequal life problem of projects is the equivalent annual annuity (EAA) method. In this method the annual cash flows under the alternative investments are converted into a constant cash flow stream whose NPV is equivalent to the NPV of the comparative project's initial stream. Consider the case of Cold Duck Manufacturing Company: Cold Duck Manufacturing Company is considering a four-year project that has a weighted average cost of capital of 11% and a net present value (NPV) of $75,682. Cold Duck Manufacturing Company can replicate this project indefinitely What is the equivalent annual annuity (EAA) for this project? $24,394 $25,614 $26,833 $29,273 An analyst will need to use the FAA approach to evaluate projects with unequal lives when the projects are

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

uestion 6 ere is some information about an article is article was published on Buzzfeed...

Basic Math
1.2K views

A and B are any positive numbers, write equations and sketch graph. A>0, B>0 Circle Write your Equation...

Accounting
1.2K views

Midlands Inc. had a bad year in 2019. For the first time in its history, it...

Physics
1.2K views

A source x of unknown frequency produces 8 beats with a source of 250 Hz...

Algebra
1.2K views

5 10 2 X 2 x 2 7 3 11x 19 6 5 3 2x...

Accounting
1.2K views

date Cash date date usiness License ex Common...

Accounting
1.2K views

For a defined benefit pension plan,target payouts can be based on ?

Accounting
1.2K views

In on-site SEO, the first step is to figure out a) the popularity of...

Accounting
1.2K views

a machine requires a $10k overhaul at the end of 5th year. After 8 years...

Accounting
1.2K views

If a company has a balance in the Accounts Receivable of $430.000 and they believe...

Finance
1.2K views

Typically there is an established threshold for a minimum downpayment on a home loan in...

Finance
1.2K views

Question 1 Solve for 1 point 2,350(1+r) 21 = 7,150 Enter your response rounded to...