Two publishers have approached you with contracts. They are mutually exclusive contracts that pay you upfront. You
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Two publishers have approached you with contracts. They are mutually exclusive contracts that pay you upfront. You will have labor costs each year after. $35,000.00 is the pay in the first year of contract A, while contract B pays $80,000.00 upfront. For contract A, the labor costs in years 1 and 2 are -$20000.00 and -$40,000.00, while they are -$35,000.00 and -$75,000.00 for contract B. At what range of discount rates would you accept contract A? How about contract B? When would you reject both?
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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