Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of factors that affect the financial condition of the communities, such as bond issues, real estate developments, etc. A small consulting firm entered into a fixed- price contract with a spec home builder, resulting in a stable income of $350,000 per year in years 1 through 5. At the end of that time, a mild recession slowed the development, so the parties signed another contract for $155,000 per year for 4 more years. Determine the present worth of the two contracts at an interest rate of 7% per year. The present worth of the two contracts is determined to be $
Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of factors that affect the financial condition of the communities, such as bond issues, real estate developments, etc. A small consulting firm entered into a fixed- price contract with a spec home builder, resulting in a stable income of $350,000 per year in years 1 through 5. At the end of that time, a mild recession slowed the development, so the parties signed another contract for $155,000 per year for 4 more years. Determine the present worth of the two contracts at an interest rate of 7% per year. The present worth of the two contracts is determined to be $
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter26: Capital Budgeting (capbud)
Section: Chapter Questions
Problem 5R
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