Rate npv 1 61714 4407 npv step 3 convert back to

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Unformatted text preview: ert back to NPV ∞ Assuming infinite replacement, the Assuming EAAs are actually perpetuities. Get the PV by dividing the EAA by the required rate of return. rate ∞ NPV 1 = 617/.14 = $4,407 NPV ∞ NPV 2 = 428/.14 = $3,057 NPV This doesn’t change the answer, of This course; it just converts EAA to a NPV that can be compared. that...
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This note was uploaded on 01/17/2014 for the course GEB 3375 taught by Professor Sweo during the Winter '08 term at University of Central Florida.

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