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An automobile tier II supplier has been offered a contract to supply a gearbox to a car company. The initial price of the gearbox is
An automobile tier II supplier has been offered a contract to supply a gearbox to a car company. The initial price of the gearbox is $389, and the car companyis ready to give a contract to the supplier to supply 500,000 gearboxes in the first year, increasing by 2% every year, if the supplier is ready to bring down the price of the gearbox every year by $7.50 over the 12-year life of the contract. How much is the contract worth to the supplier at 6% interest? Please show work using excel
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