Assume the NPV of a project is $1.5 million. The project is expected to last five...
Assume the NPV of a project is $1.5 million. The project is expected to last five years. What is the equivalent annual benefit if the discount rate is 8%?
Homework Answers
NPV =1,500,000
Number of Years =5
Discount Rate =8%
Equivalent Annual Cost =NPV/(1-(1+r)^-n)/r)
=1500000/(1-(1+8%)^-5)/8%) =375,684.68
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