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Unformatted text preview: c. If the change is considered permanent, what is the NPV of the new terms? Note: Remember the firm buys every four months, so the result of the calculation is a benefit realized every four months (three times a year). If the renegotiation becomes permanent and the firm intends to continue purchasing from this supplier in the same amount on the same frequency, it benefits from the perpetuity in 4month streams and we need an appropriate periodic interest rate. d. If the change is expected to last only, say, threeyears, what is the NPV of the new terms. Note: Calculate the PVA....
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This note was uploaded on 01/24/2012 for the course FIN 4260 taught by Professor Victorwakeling during the Spring '12 term at Kennesaw.
 Spring '12
 VictorWakeling
 Interest, Interest Rate

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