Your factory has been offered a contract to produce a part for a new printer....
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Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $4.98 million per year. Your upfront setup costs to be ready to produce the part would be $7.91 million. Your discount rate for this contract is 8.3%. a. What is the IRR? b. The NPV is $4.85 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? a. What is the IRR? The IRR is %. (Round to two decimal places.)
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