Calculating EAC

omen | 21:20 Sat 04th Apr 2009 | Business & Finance

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sorry to bother here, I try to solve my finance hw, can anyone help me?

A 9-year project has an initial fixed asset investment of $289,800, an initial NWC investment of $27,600, and an annual OCF of -$44,160. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 19 percent, the project's equivalent annual cost, or EAC, is $ ???

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Calculating EAC

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Can you tell us what NWC stands for and what OCF (something cash flow?) stands for?

omen

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NWC = net working capital
OCF= operating cash flow (net income+depreciation)

So the operating cash flow is negative?

omen

Question Author

yes, negative.

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Calculating EAC

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