Calculate the value of series of payments

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Reference no: EM132766204

Eyeview Systems Sdn Bhd., a maker of electronic surveillance equipment, is considering selling to a well-known hardware chain the rights to market its home security system. The proposed deal calls for payments of RM45,000 and RM22,000 at the end of years 1 and 2 and for annual year-end payments of RM14,500 in years 3 through 7. A final payment of RM12,000 would be due at the end of year 8.

(i) Calculate the value of this series of payments if Eyeview applies a required rate of return of 12%.

(ii) A second company has offered Eyeview a one-time payment of RM120,000 for the rights to market the home security system.

Determine whether Eyeview should accept this offer

Reference no: EM132766204

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