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Question 5 10pts Mary is in contract negotiations with a publishing house for her new novel. She has two options. She may be paid $100,000
Question 5 10pts Mary is in contract negotiations with a publishing house for her new novel. She has two options. She may be paid $100,000 up front, and receive royalties that are expected to total $26,000 at the end of each of the next five years. Alternatively, she can receive $200,000 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 8% ? Rule I: The Net Present Value rule Rule II: The Payback Rule with a payback period of two years Rule III: The internal rate of return (IRR) Rule Rule I only Rule III only Rule I and II None Rule I, II, and III Rule II only Rule II and III Rule I and
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