Country Breads uses specialized ovens to bake its bread. One…

Country Breads uses specialized ovens to bake its bread. One oven costs $268,000 and lasts about 15 years before it needs to be replaced. The annual operating cash outflow per oven is $37,000. What is the equivalent annual cost, or EAC, of an oven if the required rate of return is 11 percent?

Bruno’s Lunch Counter is expanding and expects operating cas…

Bruno’s Lunch Counter is expanding and expects operating cash flows of $24,300 a year for 4 years as a result. This expansion requires $48,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $3,000 of net working capital throughout the life of the project, which will be fully recovered at the end. What is the net present value of this expansion project at a required rate of return of 15 percent?