A manufacturing company purchased electrical services for the next 5 years to be paid for with $70,000 now. The service after 5 years will be $15,000 per year beginning with the sixth surplus profits, requested to pay for another 5 years service in advance. If the electrical year. After 2 years sservice the company, having company elected to accept payment in advance, what would each company set as a fair settlement to be paid if (a) the electrical company con- sidered 15% compounded annually as a fair return, and (b) the manufactur- ing company considered 12% a fair return?
A manufacturing company purchased electrical services for the next 5 years to be paid for with $70,000 now. The service after 5 years will be $15,000 per year beginning with the sixth surplus profits, requested to pay for another 5 years service in advance. If the electrical year. After 2 years sservice the company, having company elected to accept payment in advance, what would each company set as a fair settlement to be paid if (a) the electrical company con- sidered 15% compounded annually as a fair return, and (b) the manufactur- ing company considered 12% a fair return?
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 34P
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The answers are NOT 102456.85
109139.11
-38020.66
-43,105.58
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