Professor Wendy Smith has been offered the following deal: A law firm would like to retain her for an upfront payment of $54,000. In return, for the next year the firm would have access to 8 hours of her time every month. Smith’s rate is $578 per hour and her opportunity cost of capital is 15% (EAR). What does the IRR rule advise regarding this opportunity? What about the NPV rule?

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