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S Sabre is deciding between two new printer supply contracts after its existing supplier's printers started catching fire Using the cash flows below ($ millions),
S
Sabre is deciding between two new printer supply contracts after its existing supplier's printers started catching fire | ||||||
Using the cash flows below ($ millions), which contract is best based on the NPV? | ||||||
Which contract is cheaper for Sabre on an annual basis (EAA)? | ||||||
Which supplier is best if Sabre plans on selling printers for the foreseeable future? | ||||||
Sabre's WACC is | 16% | |||||
Year | Supplier 1 | Supplier 2 | ||||
0 | -140 | -190 | ||||
1 | -110 | -80 | ||||
2 | -110 | -80 | ||||
3 | -110 | -80 | ||||
4 | -110 | -80 | ||||
5 | -80 | |||||
6 | -80 | |||||
SHOW WORK HERE, HIGHLIGHT FINAL ANSWER IN YELLOW |
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