Question
Sandhill Company purchases a licence from Redo Industries for the right to manufacture and sell products using Redo's processes and technologies. Sandhill estimates it
Sandhill Company purchases a licence from Redo Industries for the right to manufacture and sell products using Redo's processes and technologies. Sandhill estimates it will earn $6,800 per year from this licence over the next 10 years (at the end of each year). Assume Sandhill uses 12% as the discount rate. What is the value in use to Sandhill of this licence? (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places, e.g. 5.275.) Click here to view Table A.4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 The value in use
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