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 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?

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 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?

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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You went to the car dealer to lease a car. The car is valued at $30,000 and you can drive away without putting any money down. The dealer offers you a 5 year lease with a $5,000 residual payment at the end if you want to buy the car. Assuming monthly payments of $508.32, what is the implied APR? Your answer should be close to a round number. Use a % symbol and round to the nearest 1 decimal point.....3.0% would be the form of a correct answer.
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