Your factory has been offered a contract to produce a part for a new printer. The contract would last for 33years and your cash flows from the contract would be$5.00million per year. Your up front setup costs to be ready to produce the part would be $8.00million. Your discount rate for this contract is 8.0%.

a. What does the NPV rule say you shoulddo?

b. If you take thecontract, what will be the change in the value of yourfirm?