4 Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, andyour cash flows from the contract would be $4.96 million per year. Your upfront setup costs to be ready to produce thepart would be $7.79 million. Your discount rate for this contract is 7.7%.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?wwwa. What does the NPV rule say you should do?The NPV of the project is $ million. (Round to two decimal places.)an example Get more help -Clear allCHERE

The NPV benefit is a measure of the project's profitability, and is used to evaluate whether a…

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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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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 $5.17 million per year. Your upfront setup costs to be ready to produce the part would be $8.17 million. Your discount rate for this contract is 8.3% 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?
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 $5.07 million per year. Your upfront setup costs to be ready to produce the part would be $8.02 million. Your discount rate for this contract is 7.8%. 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? (Round to two decimal places.)
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 $5.05 million per year. Your upfront setup costs to be ready to produce the part would be $8.22 million. Your discount rate for this contract is 8.3%. 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 a. What does the NPV rule say you should do? The NPV of the project is $ million. (Round to two decimal places.) firm?
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 $5.17 million per year. Your upfront setup costs to be ready to produce the part would be $7.81 million. Your discount rate for this contract is 8.4%. 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?
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 $4.99 million per year. Your upfront setup costs to be ready to produce the part would be $8.06 million. Your discount rate for this contract is 8.1%. 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? *round to two decimal places*
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? Question content area bottom 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.)
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 $4.83 million per year. Your upfront setup costs to be ready to produce the part would be $8.13 million. Your discount rate for this contract is 7.9%. 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?
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 $4.83 million per year. Your upfront setup costs to be ready to produce the part would be $8.02 million. Your discount rate for this contract is 8.1%. 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? Question content area bottom Part 1 a. What does the NPV rule say you should do? The NPV of the project is $XXX enter your response here million. (Round to two decimal places.) Part 2 What should you do? (Select the best choice below.) A. The NPV rule says that you should accept the contract because the NPV less than 0. B. The NPV rule says that you should not accept the contract because the NPV less than 0. C. The NPV rule says that you should not accept the contract because the NPV greater…
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 $4.91 million per year. Your upfront setup costs to be ready to produce the part would be $8.07 million. Your discount rate for this contract is 8.3%. 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? www. a. What does the NPV rule say you should do? The NPV of the project is $ 4.52 million. (Round to two decimal places.) What should you do? (Select the best choice below.) OA. The NPV rule says that you should not accept the contract because the NPV 0. OD. The NPV rule says that you should not accept the contract because the NPV > 0. ct
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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 $5.01 million per year. Your upfront setup costs to be ready to produce the part would be $7.97 million. Your discount rate for this contract is 7.7%. a. What is the IRR? b. The NPV is $5.01 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? a. What is the IRR? The IRR is %. (Round to two decimal places.) b. The NPV is $5.01 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? (Select from the drop-down menu.) The IRR rule with the NPV rule.
21. 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? a. The NPV of the project is $____million. (Round to two decimal places.) What should you do? (Select the best choice below.) b. If you take the contract, the value added to the firm will be $____million. (Round to two decimal places.)

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