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A firm that manufactures DVD players for automakers currently has excess capacity. The firm expects that it will exhaust its years. At that time it
A firm that manufactures DVD players for automakers currently has excess capacity. The firm expects that it will exhaust its years. At that time it will have to invest $2 million to build new capacity Suppose that the firm can accept additional work as a subcontractor for another company By doing so, the firm will receive a net cash inflow of $120,000 immediately and in each of the next two years. However, the firm will have to begin expansion two years earier tan originally planned to bring new capacity on line. Assume a discount rate of 10% what is the NPVif the frm accepts the subcontractor job? excess capacity in three T TT Paragraph , Arial 3(12pt) . T, , Path. p Words QUESTION 4 As the discount rate increases, the NPV of a project
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