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    Calculating Equivalent Equal Annuity Values

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    Determine the EAA of each project using the given table:

    Year Cash flows( Short) Cash flows (long)
    0 -1500 -2600
    1 +950 +850
    2 +950 +850
    3 +950 +850
    4 +850
    5 +850
    6 +850

    FOR THE Equivalent Annual Annuity, the cost of capital to be used is 8%.

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    https://brainmass.com/business/capital-budgeting/calculating-equivalent-equal-annuity-values-414857

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    Please refer attached file for better clarity of table.

    Years Cash Flow (Short) Cash Flow (Long) PV factor, PVF PV (Short) PV (Long)
    n Cn (S) Cn (L) 1/(1+8%)^n Cn(S)*PVF Cn(L)*PVF
    0 -1500 -2600 1.0000 -1500.00 ...

    Solution Summary

    Solution describes the steps to calculate EAA in the given cases.

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