New Castle Management Company has offered to operate the Pines Inn under the following contract:

4% of room revenue, plus 2% of all other revenue, plus 15% of IAUOE Assuming a 10% cost of capital, calculate the present value of the contract over the years 2004~2007. (Ignore taxes)

Year 2004 2005 2006 2007 Rooms Revenue $3,600,000 $3,780,000 $4,006,800 $4,287,276 Food & Beverage Revenue 1,200,000 1,260,000 1,335,600 1,442,448 Other Revenue 200,000 212,000 2,268,400 2,449,872 LAUOE 1,500,000 1,575,600 2,283,240 2,453,879