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 $320,000 per year in years 1 through 4. At the end of that time, a mild recession slowed the development, so the parties signed another contract for $150,000 per year for two more years. Determine the present worth of the two contracts at an interest rate of 10% per year.
What will be an ideal response?
P = 320,000(P/A,10%,4) + 150,000(P/A,10%,2)(P/F,10%,4)
= 320,000(3.1699) + 150,000(1.7355)(0.6830)
= $1,192,170
You might also like to view...
The lath used in stucco is called self-furring lath. What does the term "self-furring" mean?
What will be an ideal response?
The name of a subgroup indicates the order, suborder, and great group of which it is a member
Indicate whether the statement is true or false
Two technicians are discussing the lifting of a vehicle. Technician A says to put the pads of a lift under the pinch weld seams of a unit-body vehicle. Technician B says to place the pads as far apart as possible on the frame of a full-frame vehicle. Who is right?
A) A only B) B only C) Both A and B D) Neither A nor B
The shaded-pole motor ________
A) uses a capacitor and a centrifugal switch B) uses a capacitor but does not need a centrifugal switch C) does not have any capacitors or centrifugal switch