What about the npv rule, Find the monthly rate that will

What about the npv rule

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Reference no: EM132014657

Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $49,000. In retum, for the next year the firm would have access to eight hours of her time every month. As an alternative payment arrangement, the firm would pay Professor Smith's hourly rate for the eight hours each month Smith's rate is $540 per hour and her opportunity cost of capital s 15%, per year. What does the RR ule advise regarding payment arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 15%.) What about the NPV rule?

Reference no: EM132014657

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