Civil engineering consulting fi rms that provide ser- vices to outlying communities are vulnerable to a number of factors that affect the fi nancial condition of the communities, such as bond issues and real estate developments. A small consulting fi rm en- tered into a fi xed-price contract with a large devel- oper, resulting in a stable income of $260,000 per year in years 1 through 3. At the end of that time, a mild recession slowed the development, so the par- ties signed another contract for $190,000 per year for 2 more years. Determine the present worth of the two contracts at an interest rate of 10% per year.

Civil engineering consulting fi rms that provide ser- vices to outlying communities are vulnerable to a number of factors that affect the fi nancial condition of the communities, such as bond issues and real estate developments. A small consulting fi rm en- tered into a fi xed-price contract with a large devel- oper, resulting in a stable income of $260,000 per year in years 1 through 3. At the end of that time, a mild recession slowed the development, so the par- ties signed another contract for $190,000 per year for 2 more years. Determine the present worth of the two contracts at an interest rate of 10% per year.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.2SB

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