Question: You have just been offered a contract worth $ 1.24$1.24 million per year for 66 years. However, to take the contract, you will need to

You have just been offered a contract worth

$ 1.24$1.24

million per year for

66

years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is

11.6 %11.6%.

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?

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