Offered contract to produce part for new printer

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Reference no: EM131819401

Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $ 4.99 million per year. Your upfront setup costs to be ready to produce the part would be $ 8.24 million. Your discount rate for this contract is 8.3 %

a. What does the NPV rule say you should? do?

b. If you take the? contract, what will be the change in the value of your? firm?

Reference no: EM131819401

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