Professor Wendy Smith has been offered the following deal: A law firm would like to retain her

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Professor Wendy Smith has been offered the following deal: A law firm would like to retain her for an up-front payment of $52,000. In return, for the next year the firm would have access to eight hours of her time every month. Smith’s rate is $556 per hour and her opportunity cost of capital is 14% per year. What does the IRR rule advise regarding this opportunity? What about the NPV rule?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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