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In a competitive bid for the 2-year contract to maintain BIRs staple machines, they awarded Fal-rawi the contract. The contract commits to pay Fal-rawi $52
In a competitive bid for the 2-year contract to maintain BIRs staple machines, they awarded Fal-rawi the contract. The contract commits to pay Fal-rawi $52 in the first year, then $40 in the final year, each end-of-year payments. Fal-rawi expects expenses in executing the contract to be $20 up front, another $20 during the first year, and $32 during the final year.
Determine the internal rate of return (IRR) for this project. [8] If Fal-rawis MARR is 15% would they accept the project? [2]
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