Question
You have just been offered a contract worth $1.28 million per year for 6 years. However, to take the contract, you will need to purchase
You have just been offered a contract worth $1.28 million per year for 6 years. However, to take the
contract, you will need to purchase some new equipment. Your discount rate for this project is 12.6%.
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?
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
