You have just been offered a contract worth $1.05 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 is12.1%. 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 12.1% annual return is $million. (Round to two decimal places.)

Step 1: Calculate the present value of the contract.Present value of the contract = $1.05 million ×…

Answered: You have just been offered a contract…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Talk about the four different ways an organization that's working on a project might deal with or lessen the impact of risk in a certain circumstance.
You've heard the expression "no pain, no gain"? In the investment world, the comparable phrase would be "no risk, no reward." How you feel about risking your money will drive many of your investment decisions. The risk-comfort scale extends from very conservative (you don't want to risk losing a penny regardless of how little your money ears) to very aggressive (you're willing to risk much of your money for the possibility that it will grow tremendously). As you might guess, most investors' tolerance for risk falls somewhere in between. If you're unsure of what your level of risk tolerance is, this quiz should help. 8. You want to take someone out for a special dinner in a city that's new to you. How do you pick a place? (a) read restaurant reviews in the local newspaper, (b) ask co-workers if they know of a suitable place, (c) call the only other person you know in this city, who eats out a lot but only recently moved there, (d) visit the city sometime before your dinner to check out…
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one of your projects team members is highly regarded for her skills in the company. she is assigned to multiple projects at the same time and the projects compete for her time.she has a track record of successfully delivering all the projects and has never failed in any of her endeavors so far. She is also assigned to your project which is not a high-visibility project. She may not be able to spend much time on your project. Do you think this risk should be added to your projects risk register or database? a. maybeb. noc. yesd. can't say
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Projects encounter risks across its life cycle that have to be identified and responses planned for. As you identify potential project risks, you categorise them. One such category is an 'external- unpredictable risk". Which of the following is not an external-unpredictable risk? O A. Inflation OB. Unexpected environmental side effects O C. Natural hazards O D. Changes in government regulations
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