R = 13%
Annual revenue from year 2 to year 10 = $18000
So,
PW of the contract = (18000*(1-1/1.13^9)/.13)*(1/1.13)
PW of the contract = $81743.18 or $81743
Industrial Electric Services has a contract with an embassy in Mexico to provide maintenance for scanners...
Industrial Electric Services has a contract with an embassy in Mexico to provide maintenance for scanners and other devices in the building. What is the present worth of the contract (in year O) if the company will receive a total of nine $18,000 payments beginning in year 2 and ending in year 10 and the interest rate is 13% per year. The present worth of the contract for the company is $ 7.
SCENARIO Angela has an annual contract with Stenbach Service Centre to provide property maintenance services; this includes lawn care, snow removal and parking lot maintenance. Angela spends, on average, 20 hours per week working at the company's premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her. Angela does not have any other clients. Angela uses her own small tools; however the company supplies and maintains a riding lawn mower and a snow...
3. Determine the present worth of a maintenance contract that has a cost of $50,000 in year 1 and annual increases of 8% per year for 10 years. Use an interest rate of 8% per year. (10 points) Pg=. 2 - 8v. Sop VVVV. 72 70 Now $s < 4. The equivalent present worth of a geometric gradient series of cash flows for 10 years was found to be $19,776. If the interest rate was 15% per year and the...
A doctor is on contract to a medium-sized oil company to provide medical services at remotely located, widely separated refineries. The doctor is considering the purchase of a private plane to reduce the total travel time between refineries. The doctor can buy a used Learjet 31A now for $1.8 million or wait for a new very light jet (VLJ) that will be available 3 years from now. The cost of the VLJ will be $27 million, payable when the plane...
Question 15 10 points Save Answer Master Manufacturing is considering the purchase of a machine for $500,000. Alternatively, the machine could be leased on a five-year contract for $125,000 per year with lease payments made at the beginning of each year. I the company purchases the machine, maintenance costs will be $25,000 per year and the salvage value of the machine after five years is expected to be $70,000. Answer the below questions using an interest rate of 10% per...
only numbers 2,3, and 6 You are trying to decide a present worth of a contract. You will receive $10,000 when the contract is signed, a $20,000 payment at the end of Year 1, and $30,000 at the end of Year 2. and $40,000 at the end of Year 3, and $50,000 at the end of Year 4 when the project is completed. Your annual costs for this project are $10,000 per year. What is the present worth of the...
4(a) For the use of space, a warehouse owner has been offered the following contract: Year 1: $2,000 at the beginning of year 1 plus $2,000 at the end of year 1 Years 2 to 6: $2,000 per year (end-of-year payments) for years 2 to 6. Years 7 to 15: $3,000 for year 7 and for the following years, an increase of $1000/year (end of year payments) (i.e. year 7 payment will be $3,000, for year 8 the payment will...
Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2021, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $80,000. The contract specifies that Super Rise will receive an additional $40,000 at the end of the 10 months if there is no unexpected delay, stoppage, or accident during the year. Super Rise estimates variable consideration to be the...
Master Manufacturing is considering the purchase of a machine for $500,000. Alternatively, the machine could be leased on a five-year contract for $125,000 per year with lease payments made at the beginning of each year. If the company purchases the machine, maintenance costs will be $25,000 per year and the salvage value of the machine after five years is expected to be $70,000. Answer the below questions Using an interest rate of 10% per year. Match the closest correct answers...
Josh worked for the Johnson Boat Works Company as a maintenance welder for 15 years. At the beginning of each five years of employment, Josh signed a five-year work agreement with the company. Soon after Josh had signed a new five-year agreement, Josh was fired by the new owner of the company. At the time of his firing, Josh was making $25 an hour and his employer-paid benefit package, which included health care and other government mandated items, was worth...