A. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,900 and will be posted for one year. You expect that it will generate additional revenue of $649 a month. What is the payback period?

The payback period is .....months.(Round to one decimal place.)

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 $4.84

million per year. Your upfront setup costs to be ready to produce the part would be $7.77 million. Your discount rate for this contract is 7.8%.

a. What does the NPV rule say you should do?

b. If you take the contract, what will be the change in the value of your firm?

a. What does the NPV rule say you should do?

The NPV of the project is ..... million.(Round to two decimal places.)