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QUESTION 10 Mary is in contract negotiations with a publishing house for her new novel. She has two options. OPTION 1: She may be paid
QUESTION 10 "Mary is in contract negotiations with a publishing house for her new novel. She has two options. OPTION 1: She may be paid $150000 up front, and receive royalties that are expected to total $60000 at the end of each of the next 6 years. Alternatively, OPTION 2: she can receive $350000 up front and no royalties. Which of the following investment rules would indicate that she should take the former deal, given a discount rate of 0%? Rule I: The Net Present Value rule; Rule II: The Payback Rule with a payback period of 2 years; ---Rule I only. Rule Il only. Rule I and II. None." Rule I only. o Rule Il only. O Rule I and II. O None
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