Question

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 $ 5.09$5.09

million per year. Your upfront setup costs to be ready to produce the part would be $ 7.95$7.95 million. Your discount rate for this contract is 8.4 %8.4%.

a. What is the​ IRR?

b. The NPV is $ 5.07$5.07 ​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 $ 5.07$5.07 ​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 ( does or does not) with the NPV rule.

Answer 1