What is the most you can pay for the equipment

Reference no: EM132020012

Question: You have just been offered a contract worth $1.08 million per year for 7 years However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.8%. 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 11.8% annual return is $ _ million. (Round to two decimal places.)

Reference no: EM132020012

Questions Cloud

Who should you take their advice : Assuming that the risk-free rate is 4% and the expected return on the market is 12%. Who should you take their advice? (choose one person).

What will be the swap rate on an agreement to exchange : What will be the swap rate on an agreement to exchange currency over a 3-year period?

What is the yield to maturity for treasury bonds that mature : To yield a risk free rare, R*, equal to 2 percnt, what would the average nominal rate be on (a) one-year bond (b)two-year bond (c) three year bond?

What annual rate of return is implied in the given value : You are offered an investment that will pay you a perpetuity of $1,000 per year forever. Its price is $39,600. What annual rate of return (discount rate).

What is the most you can pay for the equipment : You have just been offered a contract worth $1.08 million per year for 7 years However, to take the contract, you will need to purchase some new equipment.

Conduct a trend analysis on best buy financial performance : Conduct a trend analysis on Best Buy's financial performance over five years. Include Best Buy's vision and mission or a brief background of Best Buy's business

What apr was used for the loan : You obtained a loan of $16,000 to finance an automobile. Based on monthly compounding over 36 months, the end-of-the-month equal payment is (i=6%)?

How much are payments : You are being offered a 4-year car note with monthly payments and an interest rate of 5%. The car costs $35,000 and you have a down payment of $3500.

Calculate the accrued interest at settlement : Calculate the accrued interest due to the seller from the buyer at settlement. (Do not round intermediate calculations. Round your answer to 2 decimal places.

User Account

All Pages