When Pacific Inc. bid for a project with the government, the company was offered the following two payment options: Option (A): A payment of $830,000 at the end of 3 years, which is the scheduled completion time for the project. Option (B): $200,000 paid upfront at the beginning of the project and the balance payment in 3 years If the two payments are financially equivalent and the interest rate is 4.98% compounded semi-annually, calculate the balance payment offered in Option(B). *round to the nearest cent

When Pacific Inc. bid for a project with the government, the company was offered the following two payment options: Option (A): A payment of $830,000 at the end of 3 years, which is the scheduled completion time for the project. Option (B): $200,000 paid upfront at the beginning of the project and the balance payment in 3 years If the two payments are financially equivalent and the interest rate is 4.98% compounded semi-annually, calculate the balance payment offered in Option(B). *round to the nearest cent

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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