Value of a mixed stream Harte Systems. Inc., a maker of electronic survillance e
ID: 2732785 • Letter: V
Question
Value of a mixed stream Harte Systems. Inc., a maker of electronic survillance equipment, is considering selling to a well-known hardware chain the rights to market its home security system. The proposed deal calls for the hardware chain to pay Harte $30,000 and $27,000 at the end of years 1 and 2 and to make annual year-end payments of $10,000 in years 3 through 9. A final payment to Harte of $25,000 would be due at the end of year 10. Select the time line that represents the cash flows involved in the offer. If Harte applies a required rate of return of 9% to them, what is the present value of this series of payments? A second company has offered Harte an immediate one-time payment of $110,000 for the rights to market the home security system. Which offer should Harte accept? Which of the following time lines represents the cash flows involved in the offer? (Select the best answer below.) The present value of the mixed stream of cash flows involved in the offer is $. (Round to the nearest dollar.) Which offer should Harte accept? (Select the best answer below.) Immediate one-time payment offer Series of payments offerExplanation / Answer
ANSWER TO A IS D
1- 30000 2- 27000 3- 9 YEARS 10000 AND AT 10 YEAR 25000
ANSWER NO 2 YEAR CASH INFLOW PRESENT VALUE @9% PRESENT VALUE OF CASH INFLOW 1 30000 0.91743119 27522.9358 2 27000 0.84167999 22725.3598 3 10000 0.77218348 7721.8348 4 10000 0.70842521 7084.25211 5 10000 0.64993139 6499.31386 6 10000 0.59626733 5962.67327 7 10000 0.54703424 5470.34245 8 10000 0.50186628 5018.6628 9 10000 0.46042778 4604.2778 10 25000 0.42241081 10560.2702 PRESENT VALUE OF CASH INFLOW 103169.923 ANSWER NO 3 2ND OFFER IS OF 110000 ONE TIME RIGHT NOW PRESENT VALUE 110000 HE SHOULD OPT FOR IMMEDIATE ONE TIME PAYMENT OFFERRelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.