Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,200,000 to use for contracting with local land owners. The company can contract with multiple local land owners. Assume the company has a MARR of 10% per year.

A)The Smith's are interested in contracting with Bremily. The company will pay $586,264 today for the rights to the Smith's land. They will begin cutting firewood next year and expect to have net cash flow of $168,834 at the end of each year for the next 5 years. What is the net future value of contracting with the Smith's?

B)The Johnson's are also interested in contracting with Bremily to cut firewood on their land for the next 5 years. Assume the net present value of contracting with the Johnson's is $-27,249. What is the annual worth of contracting with the Johnson's?

C)

Use the following information to determine which land owners Bremily should contract with. Assume each land owner has three of each parcel available and each parcel has an expected life of 6 years.

Land Owner	Initial Cost	Net Present Value
Peterson	$564,000	$473,000
Johnson	$475,000	$351,000
Smith	$268,000	$194,000
Jefferson	$832,000	$609,000