Answered step by step
Verified Expert Solution
Question
1 Approved Answer
thank8s Value of a mixed stream Harte Systems, Inc., a maker of electronic survillance equipment, is considering selling to a well-known hardware chain the rights
thank8s
Value of a mixed stream Harte Systems, Inc., a maker of electronic survillance equipment, is considering selling to a well-known hardware chain the rights to market its home security system. The proposed deal calls for the hardware chain to pay 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 $10,000 would be due at the end of year 10. a. Select the time line that represents the cash flows involved in the offer. b. If Harte applies a required rate of return of 12% to them, what is the present value of this series of payments? C. 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? a. Which of the following time lines represents the cash flows involved in the offer? (Select the best answer below.) O A 0 1 2. 3-9 10 $10,000 $15,000 $25,000 $30,000 . 1 2 3-9 10 $30,000 $25,000 $15,000 $10,000 OC. 0 1 2 3-9 10 $30,000 $25,000 $15,000 $10,000 D. 0 1 2 3-9 10 $30,000 $25,000 $15,000 $10,000 b. The present value of the mixed stream of cash flows involved in the offer is $ 101288.5. (Round to the nearest dollar.) c. Which offer should Harte accept? (Select the best answer below.) O A. Immediate one-time payment offer OB. Series of payments offerStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started