Professor Wendy Smith has been offered the following deal: A law firm would like to retain her for an upfront payment of $ 60,000. In return, for the next year, the firm would have access to eight hours of her time every month. Smith's rate is $ 630 per hour, and her opportunity cost of capital is 14 % (equivalent annual rate, EAR).

What is the IRR (annual)? What does the IRR rule advice regarding this opportunity?

What is the NPV? What does the NPV rule say about this opportunity?

What is the IRR (annual)? The IRR (annual) is ________________%. What does the IRR rule advice regarding this opportunity?

Smith's cost of capital is 14 %, so according to the IRR rule, she should turn down this opportunity. What is the NPV?

The NPV is $_______________ What does the NPV rule say about this opportunity? The NPV is _______________,