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Professor Wendy Smith has been offered the following​ opportunity: A law firm would like to retain...

Professor Wendy Smith has been offered the following​ opportunity: A law firm would like to retain her for an upfront payment of $ 49 comma 000. In​ return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment​ arrangement, the firm would pay Professor​ Smith's hourly rate for the eight hours each month. ​ Smith's rate is $ 535 per hour and her opportunity cost of capital is 15 % per year. What does the IRR rule advise regarding the payment​ arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 15 %​.) What about the NPV​ rule? The IRR is d​%. ​(Round to two decimal​ places.)

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jeff jeffy answered 1 year ago
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