Mr. Shields wants to acquire the company, Upstate Canning, from its owner, Mr. Fordham. Part of the agreement is that Shields is to issue $350,000 worth of bonds to Fordham. Here are the details of a proposed bond repurchasing program (in which Shields repurchases the bonds from Fordham):

a. New company to repurchase $50,000 of bonds on or before June 30, 1958.

b. In succeeding years, company to repurchase bonds equivalent in par value to 50% of net income, provided that the amount of bonds repurchased in any given year will be no less than $30,000. The $30,000 minimum payment will be due on June 30 and any additional balance will be due on July 31.

c. New company to have the option of purchasing any amount of bonds in excess of the minimum requirements according to a schedule of discounted prices as follows:

i. Year 1