Question

Your company will purchase a construction scheduling program. Vendor A's initial costs is $75,000 and you expect a positive cash flow of $18,000 every year for the 7-year life of the product. Vendor B's software costs $90,000 and you expect a positive cash flow of $24,000 every year for the 7-year lifetime of the product.  If your firm's MARR is 10% what is vendor A's software's future worth in dollars?

Answer 1

Future Value is $ 24,615.30

Year	Cash flow	Future Value of 1	Future Value of cash flow
a	b	c=1.10^(7-a)
0	$ -75,000.00	1.9487	$ -1,46,153.78
1	$   18,000.00	1.7716	$       31,888.10
2	$   18,000.00	1.6105	$       28,989.18
3	$   18,000.00	1.4641	$       26,353.80
4	$   18,000.00	1.3310	$       23,958.00
5	$   18,000.00	1.2100	$       21,780.00
6	$   18,000.00	1.1000	$       19,800.00
7	$   18,000.00	1.0000	$       18,000.00
	Total		$       24,615.30