Question
You have just been offered a contract worth $ 1.17 million per year for 55 years. However, to take the contract, you will need to
You have just been offered a contract worth
$ 1.17
million per year for
55
years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is
11.8 %1
You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive
NPV?
Round to 2 decimals
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Financial Risk Manager Handbook
Authors: Philippe Jorion
6th Edition
0470904011, 978-0470904015
