our factory has been offered a contract to produce a part for a new printer. The contract would last for threeyears, and your cash flows from the contract would be

$5.06

million per year. Your upfront setup costs to be ready to produce the part would be

$8.06

million. Your discount rate for this contract is

7.8%.

a. What is the IRR?

b. The NPV is

$5.03

million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule?

a. What is the IRR?

The IRR is

enter your response here%.

(Round to two decimal places.)b. The NPV is

$5.03

million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule?(Select from the drop-down menu.)The IRR rule

agrees

doesn't agree

with the NPV rule.