Determine the present worth of the two contracts

Reference no: EM13189125

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 and real state developments. A small consulting firm entered into a fixed-price contract with a large developer, resulting in a stable income of $260,000 per year in years 1 through 3. At the end of that time a mild recesion slowed the development so the parties signed another contract for $190,000 per year for 2 more years. Determine the present worth of the two contracts at an interest rate of 10% per year.

Reference no: EM13189125

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