Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of...
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 $360,000 per year in years 1 through 6. At the end of that time, a mild recession slowed the development, so the parties signed another contract for $150,000 per year for 3 more years. Determine the present worth of the two contracts at an interest rate of 7% per year. The present worth of the two contracts is determined to be $_______?
Homework Answers
Present worth of first contract = Yearly income * PVIFA(interest rate, n) = $360000 * PVIFA( 7% , 6) = $360000 * 4.766 = $1715760
Present worth of second contract = Yearly income * [PVIF(7% ,7) + PVIF(7% ,7) + PVIF(7% ,7) ]= $150000 * ( 0.623+ 0.582+ 0.544) = $262350
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Civil engineering consulting firms that provide services to
outlying communities are vulnerable to a number of...
Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of...
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 $330,000 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...
Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of...
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 $375,000 per year in years 1 through 6. At the end of that time, a mild recession slowed the development, so the parties signed another contract for...
MULTIPLE-CHOICE questions E1-1.ABC Engineering use cost method to cart engineering use cost method to calculate the...
MULTIPLE-CHOICE questions E1-1.ABC Engineering use cost method to cart engineering use cost method to calculate the stage of completion of its construction act. Total estimated contract costs of their contract are $100 million. In the first year of their contract, ABC Engineering has incurred the following costs: Cost of purchase of raw materials worth $10 million ($5 million of which are unused by the year end) 2. Payment of salaries and wages of $5 million ($1 million of accrued salaries...
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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 $330,000 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...
MULTIPLE-CHOICE questions E1-1.ABC Engineering use cost method to cart engineering use cost method to calculate the stage of completion of its construction act. Total estimated contract costs of their contract are $100 million. In the first year of their contract, ABC Engineering has incurred the following costs: Cost of purchase of raw materials worth $10 million ($5 million of which are unused by the year end) 2. Payment of salaries and wages of $5 million ($1 million of accrued salaries...
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