Your factory has been offered a contract to produce a part for a new printer. The contract would last for threeyears, and your cash flows from the contract would be $5.02million per year. Your upfront setup costs to be ready to produce the part would be $7.94million. Your discount rate for this contract is 8.1%.

a. What is theIRR?

b. The NPV is $4.97million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPVrule?