Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $5.09 million per year. Your upfront setup costs to be ready to produce the part would be $8.04 million. Your discount rate for this contract is 7.6%. What does the NPV rule say you should do? . If you take the contract, what will be the change in the value of your firm? What does the NPV rule say you should do? The NPV of the project is $ What should you do? (Select the best choice below.) million. (Round to two decimal places.) OA The NPV rule says that you should not accept the contract because the NPV> 0. OB. The NPV rule says that you should not accept the contract because the NPV<0. OC. The NPV rule says that you should accept the contract because the NPV <0. OD. The NPV rule says that you should accept the contract because the NPV>0. 2. If you take the contract, what will be the change in the value of your firm? If you take the contract, the value added to the firm will be S million. (Round to two decimal places.) Johnson
Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $5.09 million per year. Your upfront setup costs to be ready to produce the part would be $8.04 million. Your discount rate for this contract is 7.6%. What does the NPV rule say you should do? . If you take the contract, what will be the change in the value of your firm? What does the NPV rule say you should do? The NPV of the project is $ What should you do? (Select the best choice below.) million. (Round to two decimal places.) OA The NPV rule says that you should not accept the contract because the NPV> 0. OB. The NPV rule says that you should not accept the contract because the NPV<0. OC. The NPV rule says that you should accept the contract because the NPV <0. OD. The NPV rule says that you should accept the contract because the NPV>0. 2. If you take the contract, what will be the change in the value of your firm? If you take the contract, the value added to the firm will be S million. (Round to two decimal places.) Johnson
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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