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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 $ 5.08 million per year. Your upfront setup costs to be ready to produce the part would be $ 8.07 million. Your discount rate for this contract is 7.5%. a. What is the IRR? b. The NPV is $5.14 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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Financial Management, Finance

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