You have just been offered a contract worth $1.00 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment. You discount rate for this project is 12.0%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have positive NPV? Lo Eat CHEECH 20 The most you can pay for the equipment and achieve the 12.0% annual return is $ million. (Round to two decimal places.)
You have just been offered a contract worth $1.00 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment. You discount rate for this project is 12.0%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have positive NPV? Lo Eat CHEECH 20 The most you can pay for the equipment and achieve the 12.0% annual return is $ million. (Round to two decimal places.)
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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2. You have just been offered a contract worth $1.00 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 12.0%. 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 ?
**round to two decimal places**
Transcribed Image Text:You have just been offered a contract worth $1.00 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment. Your
discount rate for this project is 12.0%. 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?
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BEEEH
4/20
The most you can pay for the equipment and achieve the 12.0% annual return is $ million. (Round to two decimal places.)
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