Provide services to outlying communities are vulnerable

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Reference no: EM131817270

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 $315,000 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 $195,000 per year for 3 more years. Determine the present worth of the two contracts at an interest rate of 14% per year.

The present worth of the two contracts is determined to be $ ____?

Reference no: EM131817270

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