Reference no: EM132560190

Question - Arcon and Byrnco have both submitted bids for an equipment service contract. Their offers are:

Arcon:

$9,500 to be paid immediately

$5,000 to be paid one year from now

$5,000 to be paid two years from now

Byrnco:

$10,500 to be paid one year from now

$10,500 to be paid two years from now

Part A: If money is worth 5 % compounded semi-annually, what is the value of Arcon company's bid in today's dollars?

Part B: If money is worth 5 % compounded semi-annually, what is the value of Byrnco company's bid in today's dollars?

Part C: Which company has the lowest bid (Arcon or Byrnco)?