You have just been offered a contract worth $1.07 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.8%. 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? The most you can pay for the equipment and achieve the 11.8% annual return is $ million. (Round to two decimal places.)

You have just been offered a contract worth $1.07 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.8%. 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? The most you can pay for the equipment and achieve the 11.8% annual return is $ million. (Round to two decimal places.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...

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