What Is the Equivalent Annual Cost for a Project That

question 52

Multiple Choice

What is the equivalent annual cost for a project that requires a $40,000 investment at time zero,and a $10,000 annual expense during each of the next 4 years,if the opportunity cost of capital is 10%?

• A) $20,000.00
• B) $21,356.95
• C) $22,618.83
• D) $25,237.66

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Definitions:

Properly Payable

Refers to checks or drafts that meet all criteria for payment by the bank on which they are drawn, in accordance with the account holder's instructions and the bank's agreement with the customer.

Refusing To Pay

Refusing to pay describes a situation where a party deliberately does not settle a financial obligation, debt, or bill owed to another.

Postdated

Referring to a check or other document dated at some point in the future, not effective or valid until that date.

Properly Payable

A term referring to checks or other negotiable instruments that meet all requirements for payment by the financial institution on which they are drawn.