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How to calculate minimum contract price

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Reference no: EM132660745

Problem 1: How to calculate minimum contract price that the company is willing to accept for the project? The contract price will pay at the end of project (lumsum)

List of expense per month

1 -$500

2 -$600

3 -$700

Interest rate: 1% per month

Cost of capital: the company agrees that the investment analysis should assume a risk-adjusted discount rate of 12% per annum.

Discount rate: zero inflation

Reference no: EM132660745

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