3. If a product required an outlay of $7000 initially, $3000 at the end of the first year, $5000 at the end of the third year $4000 at the end of the 6th year, and $3000 at the end of the 7th year (assume i=10%).

a) How much is the capitalized cost needed to fund this?

b) What would be the equivalent annual cost if the project lasts for 14 years?

 

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