a). IRR can be calculated using the IRR function with the annual cash flows.
CF0 = -7,920,000; CF1 = 5,080,000; CF2 = 5,080,000; CF3 = 5,080,000
IRR = 41.50%
b). Yes, the IRR rule agrees with the NPV rule as IRR > discount rate, so the project is acceptable.
Your factory has been offered a contract to produce a part for a new printer. The...
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 $ 5.04$5.04 million per year. Your upfront setup costs to be ready to produce the part would be $ 7.93$7.93 million. Your discount rate for this contract is 7.9 %7.9%. a. What is the IRR? b. The NPV is $ 5.08$5.08 million, which is positive so the NPV rule...
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 $5.05 million per year. Your upfront setup costs to be ready to produce the part would be $7.92 million. Your discount rate for this contract is 7.7%. a. What is the IRR? b. The NPV is $5.17 million, which is positive so the NPV rule says to accept the...
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 $ 5.08 million per year. Your upfront setup costs to be ready to produce the part would be $ 8.08 million. Your discount rate for this contract is 8.5 %. a. What is the IRR? b. The NPV is $ 4.89 million, which is positive so the NPV rule...
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 $ 4.97 million per year. Your upfront setup costs to be ready to produce the part would be $ 7.92 million. Your discount rate for this contract is 7.7 %. a. What is the IRR? b. The NPV is $ 4.96 million, which is positive so the NPV rule...
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 $4.93 million per year. Your upfront setup costs to be ready to produce the part would be $7.93 million. Your discount rate for this contract is 8.2%. a. What is the IRR? b. The NPV is $4.73 million, which is positive so the NPV rule says to accept the...
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 $5.05 million per year. Your upfront setup costs to be ready to produce the part would be $7.94 million. Your discount rate for this contract is 8.3%. a. What is the IRR? b. The NPV is $5.00 million, which is positive so the NPV rule says to accept the...
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 $8.07 million. Your discount rate for this contract is 8.3%. a. What is the IRR? b. The NPV is $4.77 million, which is positive so the NPV rule says to accept the...
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 $4.97 million per year. Your upfront setup costs to be ready to produce the part would be $7.99 million. Your discount rate for this contract is 8.1%. a. What is the IRR? b. The NPV is $4.80 million, which is positive so the NPV rule says to accept the...
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 million per year. Your upfront setup costs to be ready to produce the part would be $8 million. Your discount rate for this contract is 8%. a. What does the NPV rule say you should do? b.If you take the contract, what will be the change in the...