Your factory has been offered a contract to produce a part for anew printer. The contract would last for 3 years and your cashflows from the contract would be $ 5.15 million per year. Your?up-front setup costs to be ready to produce the part would be $7.92 million. Your discount rate for this contract is 7.7 %.
a. What does the NPV rule say you should? do?
b. If you take the? contract, what will be the change in thevalue of your? firm?
