Question
Your company is interested in having a new facility constructed. The contractor expects that it will take approximately 3 years to complete the building. The
Your company is interested in having a new facility constructed. The contractor expects that it will take approximately 3 years to complete the building. The contractor has offered you three payment plans for the building. They are as follows:
| Time | Plan 1 | Plan 2 | Plan 3 |
| Today | $4,800,000 | $7,200,000 | $0 |
| 1 year from now | $15,600,000 | $0 | $26,100,000 |
| 2 years from now | $15,600,000 | $22,800,000 | $0 |
| 3 years from now | $15,600,000 | $22,800,000 | $26,100,000 |
The CFO of your company has asked you to provide recommendation concerning which payment plan to accept. What is your recommendation? Assume your weighted-average cost of capital is 14%.
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How To Audit The Process Based QMS
Authors: Dennis R. Arter, Charles A. Cianfrani, Jack West
1st Edition
0873895770, 978-0873895774
