Civil engineering consulting firms that provide services to outlying communities are vulnerable to a number of factors that affect the financial condition of the communities, such as bond issues, real estate developments, etc. A small consulting firm entered into a fixed- price contract with a spec home builder, resulting in a stable income of $345.000 per year in years 1 through 7. At the end of that time. a mild recession slowed the development, so the parties signed another contract for $150,000 per year for 2 more years. Determine the present worth of the two contracts at an interest rate of 13% per year. The present worth of the two contracts is determined to be $