Electric car maker Gentech signed a $75 million contract with Power Systems, Inc. to automate a major part of its assembly line system. If Power Systems will be paid 2 years from now, when the systems are ready, determine the present worth of the contract at 18% per year interest.

What will be an ideal response?


P = 75(P/F,18%,2)
= 75(0.7182)
= $53.865 million

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