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a. Smith Company is offered a contract whereby it will be paid \(\$ 12,000\) every 6 months for the next 10 years. The first payment would be received six months from today. What will the company be willing to pay for this contract if it expects a \(14 \%\) annual return on the investment? What if it expects an annual return of only \(10 \%\) ?

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b. Titsch Company is offered a contract whereby it will be paid \(\$ 24,000\) annually for the next 10 years. The first payment would be received one year from today. What will the company be willing to pay for this contract if it expects a \(14 \%\) return on the investment? What if it expects an annual return of only \(10 \%\) ?