Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $5.00 million per year. Your upfront setup costs to be ready to produce the part would be $8.00 million. Your discount rate for this contract is 8.0%.   a. What does the NPV rule say you should​ do? b. If you take the​ contract, what will be the change in the value of your​ firm

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
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Your factory has been offered a contract to produce a part for a new printer. The contract would last for

3 years and your cash flows from the contract would be $5.00 million per year. Your upfront setup costs to be ready to produce the part would be $8.00 million. Your discount rate for this contract is 8.0%.
 
a. What does the NPV rule say you should​ do?
b. If you take the​ contract, what will be the change in the value of your​ firm?

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Part 1
a. What does the NPV rule say you should​ do?
 
The NPV of the project is $ enter your response here XX million.  ​(Round to two decimal​ places.)
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