23. You have just been offered a contract worth $1.12 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.5%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive NPV? The most you can pay for the equipment and achieve the 11.5%annual return is $____ million.
23. You have just been offered a contract worth $1.12 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.5%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive NPV? The most you can pay for the equipment and achieve the 11.5%annual return is $____ million.
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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23. You have just been offered a contract worth $1.12 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.5%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive
The most you can pay for the equipment and achieve the 11.5%annual return is $____ million.
(Round to two decimal places.)
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