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COSTU uud 7. Your firm has been offered a contract to complete a three-year project based on a financing type arrangement. The client would advance

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COSTU uud 7. Your firm has been offered a contract to complete a three-year project based on a financing type arrangement. The client would advance $1.0 million at the inception of the project. You estimate that these funds would be disbursed as follows: Year 1 $750,000; Year 2-$200,000; Year 3-$50,000. In addition, your firm would need to agree to spend an additional $20,000 in Year 3 as a contingency for any cost overruns. Surplus funds would be segregated as restricted cash in a money market account earning 1.5% per year. In the space below perform the computations necessary to determne whether or not to con sider this contract. State your recommendation and the reasons for it

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