A programmer is selling the rights of a newvideo game he has developed. Three companies have offered himcontracts.1. The first contract offers payments of $60,000 at the end of eachyear for the next 15 years.2. The second contract offers $50,000 at the end of each year for10 years, and then $90,000 per year for the following 5 years.3. The third contract offers 15 payments, starting with $35,000 atthe end of the first year, $40,000 atthe end of the second, and so forth, increasing by $5,000 eachyear, i.e., the last payment (at theend of year 15) will be $35,000 + (14x$5,000)).Assume the genius uses a MARR of 10%. Based on the PresentWorth, which offer should be selected?

3. Third Contract The third contract offers payments starting at $35,000, increasing by $5,000 each…

Answered: A programmer is selling the rights of a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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