Pay for the equipment and still have positive NPV

Assignment Help Financial Management

Reference no: EM131504408

You have just been offered a contract worth $1.09 million per year for 5 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 12.2%. 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 ? The most you can pay for the equipment and achieve the 12.2% annual return is million.

Reference no: EM131504408

Questions Cloud

How much of the income is allocated to edward : The partners do not have articles of partnership. The partnership has net income of $120,000. How much of the income is allocated to Edward?

Compute the variation for the profit : Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk?

Hedge positions should the organization adopt : Remaining unhedged, forward market hedge and money market hedge. Which of these hedge positions should the organization adopt?

What obligation does the corporation have to this party : Identify a party (other than stockholders) that can be classified as a stakeholder for a corporation. What obligation does the corporation have to this party?

Pay for the equipment and still have positive NPV : You have just been offered a contract worth $1.09 million per year for 5 years.? What is the most you can pay for the equipment and still have a positive NPV.

Which of the following is most likely to be the cause of her : Which of the following pathophysiologic phenomena would be most indicative of ankylosing spondylitis?

Best deal with water pollution along its shoreline : Suppose the government of an ocean-side municipality is trying to determine how to best deal with water pollution along its shoreline.

Determine the amount of dollars : a. Determine the amount of dollars that you will receive if you use a forward hedge.

Calculate the npv of this investment opportunity : FastTrack? Bikes, Inc. is thinking of developing a new composite road bike. Calculate the NPV of this investment opportunity. Should the company make investment

User Account

All Pages