Arcon and Byrnco have both submitted bids for an equipment service contract. Their offers are:

Arcon:

• $9,500 to be paid immediately
• $5,000 to be paid one year from now
• $5,000 to be paid two years from now

Byrnco:

• $10,500 to be paid one year from now
• $10,500 to be paid two years from now

Part A: If money is worth 6 % compounded semi-annually, what is the value of Arcon companys bid in todays dollars?

Part B: If money is worth 6 % compounded semi-annually, what is the value of Byrnco companys bid in todays dollars?

Part C: Which company has the lowest bid (Arcon or Byrnco)?