[shinnoda94]

Hi,

This 5.335 figure is the annuity factor at 10% for 8 years.

AF = (1-(1+r)^-n)/r

It is essentially a combination of 1/1.10 + 1/1.10^2 + 1/1.10^3… 1/1.10^8.

We use this factor for project appraisal when the expected inflow ($500,000) stays the same each year, throughout the project horizon (8 years).

Hope this helps.

[Author]

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