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A manager considers purchasing security services. The cost of such services is $74,000, payable now. The security services would provide savings of $8,000 a year,
A manager considers purchasing security services. The cost of such services is $74,000, payable now. The security services would provide savings of $8,000 a year, starting from a year from today and continues forever. If the opportunity cost of capital is 10%, should the manager purchase these services? It does not matter whether the contract is taken or not, since NPV =0. No, since net present value (NPV) is negative. Yes, since net present value (NPV) is negative. Yes, since net present value (NPV) is positive
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