. Global Enterprises has just signed a $3 million contract. The contract calls for a payment of $.5 million today, $.9 million one year from today, and $1.6 million two years from today. What is this contract really worth if Global Enterprises can earn 12 percent on its money? (Show Work)

. Global Enterprises has just signed a $3 million contract. The contract calls for a payment of $.5 million today, $.9 million one year from today, and $1.6 million two years from today. What is this contract really worth if Global Enterprises can earn 12 percent on its money? (Show Work)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 5MC

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A contract calls for a payment of $500,000 million today, $650,000 one year from today, and $800,000 million two years from today. What is this contract worth today at a discount rate of 6 percent?
30. Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $4.93 million per year. Your upfront setup costs to be ready to produce the part would be $7.91 million. Your discount rate for this contract is 7.8%. a. What is the IRR? b. The NPV is $4.84 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? **round to two decimal places**
= Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $4.93 million per year Your upfront setup costs to be ready to produce the part would be $7.97 million Your discount rate for this contract is 7.7% a. What is the IRR? b. The NPV is $4.80 million, which is positive, so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? a. What is the IRR? The IRR is (Round to two decimal places)
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4.-DO IT IN EXCEL, AND SHOW THE FORMULASIf the company purchases the machine, its cost of $276,000 will be financed with a loan at 14.8% interest for three years requiring equal annual payments including principal and interest. The machine will be depreciated at 20% per year. The company will pay $8,000 per year for maintenance services. The company plans to keep the machine even after its payback period. What is the total amount paid? A) $236,337.96 B) $304,972.67 C) None of the above D) $361,442.71 (Choose one option)
A famous quarterback just signed a $10.8 million contract providing $2.7 million a year for 4 years. A less famous receiver signed a $7.0 million 4-year contract providing $3 million now and $2.2 million a year for 4 years. The interest rate is 8%. a. What is the PV of the quarterback's contract? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million b. What is the PV of the receiver's contract? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million