Problem:
A 7-year project has an initial fixed asset investment of $34,020, an initial NWC investment of $3,240, and an annual OCF of -$51,840. The fixed asset is fully depreciated over the life of the project and has no salvage value.
Required:
Question: If the required return is 8 percent, what is the project's equivalent annual cost, or EAC?
Note: Provide support for your rationale.