Question: A company is considering a project that requires an initial outlay of 1,500 SEK. The project will produce a first cash-flow of 400 SEK at

A company is considering a project that requires an initial outlay of 1,500 SEK. The project will produce a first cash-flow of 400 SEK at the end of year 1 and then the subsequent yearly cash-flows will grow at a rate of 2% per year. The project has a lifespan of 6 years. Suppose that you know that the EAR rate is equal to 4%.

What is the EAA of this project?

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