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Security service for a corporation housed in a large office building/training complex can be provided in one of two ways. A s
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Answer #1

Initial outlay = 102979

Present value of contract payment= PV of annuity = Annuity*(1-1/(1+rate)^number of terms)/rate

= 27151*(1-1/(1+24.7%)^9)/24.7%=94846.92

Present value of salvage = 7.6%*102979/(1+24.7%)^9=1073.41

Present value of supplies= PV of annuity = Annuity*(1-1/(1+rate)^number of terms)/rate

= 6331*(1-1/(1+24.7%)^9)/24.7%=22116.16

Net present worth = - Initial outlay- Present value of contract payment- Present value of supplies+ P

resent value of salvage

= -102979-94846.92-22116.16+1073.41

=-218868.67

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