Use present worth comparison

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Reference no: EM131242611

A young software engineer is selling the rights to a new video game he has developed. Two companies have offered him contracts. The first contract offers $10 000 at the end of each year for the next five years, and then $20 000 per year for the following 10 years. The second offers 10 payments, starting with $10 000 at the end of the first year, $13 000 at the end of the second, and so forth, increasing by $ 3000 each year (i. e., the tenth payment will be $10 000+9 x $3000). Assume a MARR of 9 percent. Which contract should he choose? Use a present worth comparison.

Reference no: EM131242611

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