Value of a mixed stream Harte Systems, Inc., a maker of electronic survillance equipment, is considering selling the rights to market its home security system to a well-known hardware chain. The proposed deal calls for the hardware chain to pay Harte $34,000 and $29,000 at the end of years 1 and 2 and to make annual year-end payments of $14,000 in years 3 through 9. A final payment to Harte of $10,000 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? c. A second company has offered Harte an immediate one-time payment of $120,000 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.) OA. 0 1 2 3 OB. OC. OD. 0 0 0 $10,000 $14,000 1 2 $34,000 1 $29,000-$14,000 2 $29,000 3 $34,000 $29,000 1 2 3 $14,000 3 -$34,000-$29,000-$14,000 9 10 $29,000 $34,000 9 10 -$14,000 $10,000 9 10 $14,000 $10,000 9 10 -$14,000-$10,000
Value of a mixed stream Harte Systems, Inc., a maker of electronic survillance equipment, is considering selling the rights to market its home security system to a well-known hardware chain. The proposed deal calls for the hardware chain to pay Harte $34,000 and $29,000 at the end of years 1 and 2 and to make annual year-end payments of $14,000 in years 3 through 9. A final payment to Harte of $10,000 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? c. A second company has offered Harte an immediate one-time payment of $120,000 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.) OA. 0 1 2 3 OB. OC. OD. 0 0 0 $10,000 $14,000 1 2 $34,000 1 $29,000-$14,000 2 $29,000 3 $34,000 $29,000 1 2 3 $14,000 3 -$34,000-$29,000-$14,000 9 10 $29,000 $34,000 9 10 -$14,000 $10,000 9 10 $14,000 $10,000 9 10 -$14,000-$10,000
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 2P
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