Professor Wendy Smith has been offered the following deal: A law firm would like to retain her for an upfront payment of
Posted: Sun Apr 17, 2022 6:26 pm
Professor Wendy Smith has been offered the following deal: A law
firm would like to retain her for an upfront payment of $52,000. In
return, for the next year the firm would have access to 8 hours of
her time every month. Smith's rate is $556 per hour and her
opportunity cost of capital is 14%(EAR). What does the IRR rule
advise regarding this opportunity? What about the NPV
rule?
firm would like to retain her for an upfront payment of $52,000. In
return, for the next year the firm would have access to 8 hours of
her time every month. Smith's rate is $556 per hour and her
opportunity cost of capital is 14%(EAR). What does the IRR rule
advise regarding this opportunity? What about the NPV
rule?