Question
Jenkins Security has learned that a rival has offered to supply a parking garage with security for ten years for $45,000 up front and
Jenkins Security has learned that a rival has offered to supply a parking garage with security for ten years for $45,000 up front and a further $25,000 per year. If Jenkins Security offers to provide security for eight years for an upfront cost of $60,000 and a separate yearly payment, what is the maximum that this yearly payment can be so that Jenkins' offer matches the equivalent annual annuity of their rival's offer? (Assume a cost of capital of 6%.)
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International Marketing And Export Management
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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