P5-32 value of mixed stream: Harte Systems

Value of a mixed stream Harte Systems, Inc., a maker of electronic surveillance equipment, is considering selling to a well-known hardware chain the right to market its home security system. The proposed deal calls for the hardware chain to Harte $30,000 and $25,000 at the end of years 1 and 2 and to make annual year. end payments of $15,000 in years 3 through 9. A final payment to Harte of would be due at the end of year 10. Lay out the cash flows involved in the offer on a time line. If Harte applies a required rate of return of 12% to them, what is the percent value of this series of payments? A second Company has offered Harte an immediate one-time payment of $100,000 for the rights to market the home security system. Which offer should Harte accept