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 $365,000 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 $160,000 per year for 3 more years. Determine the present worth of the two contracts at an interest rate of 9% per year. The present worth of the two contracts is determined to be $ [

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 $365,000 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 $160,000 per year for 3 more years. Determine the present worth of the two contracts at an interest rate of 9% per year. The present worth of the two contracts is determined to be $ [

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 $365,000 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 $160,000 per year for 3 more years.
Determine the present worth of the two contracts at an interest rate of 9% per year.
The present worth of the two contracts is determined to be $ [

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