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Part 1

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 $4.97

million per year. Your upfront setup costs to be ready to produce the part would be

$7.97 million. Your discount rate for this contract is 7.8%.

a. What is the IRR?

b. The NPV is $4.88 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule?

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Part 1

a. What is the IRR?

(Round to two decimal places.)

Part 2

b. The NPV is $4.88

million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule?(Select from the drop-down menu.)The IRR rule

agree or dont agree with the NPV rule.?