Question
A software designer has been asked to build a few apps for a start-up company. The company can't pay him a salary but rather will
A software designer has been asked to build a few apps for a start-up company. The company can't pay him a salary but rather will pay him a commission on sales for the smart phone apps that he writes. He will get a 31.00% royalty for his effort. The company has projected that sales will be $88,304.00 next year, and will grow by 3.00% per year after that. The contract will pay the designer for the next 5.00 years. The designer wants an 7.00% return on his investments.
Suppose that the designer invests each cash flow at his desired return, what is the account value at the end of this contract?
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