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EXCEL They offer you a food concession to sell food during baseball games You expect to earn $40,000 per game and there are 20 games
EXCEL They offer you a food concession to sell food during baseball games You expect to earn $40,000 per game and there are 20 games per season (year). There are two options: pay an initial fee of $2,000,000 for a 10-year contract, or pay a $1,000,000 initial fee for a 5-year contract (5 years only, non-renewable). With a MARR of 10% per year: a) What is the best option with a study period of 10 years? Suppose you can invest your principal earning an interest rate equal to the MARR. Use FV b) What is the best option with a study period of 5 years? Suppose if you choose the contract 10 years, after 5 years you can sell your rights for the remaining 5 years to another company in 1,000,000. Use NPV
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