Question

A defense contract company has just won a contract for $5.25 million. If work is completed...

A defense contract company has just won a contract for $5.25 million. If work is completed on schedule it will receive a series of progress payments. The first $250,000 will be received 15 days after the contract is signed. Further payments of $500,000 each will be received at 60, 90, and 180 days. The remaining $3.5 million will be received 360 days after the contract is signed. If the company's interest rate is 7.5% what is the present worth of the progress payments on the contract signing date of November 10, 2018?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Using XNPV function in Excel

interest 7.5%
initial investment 0 10-11-2018
1st Payment 250000 25-11-2018
2nd Payment 500000 09-01-2019
3rd Payment 500000 08-02-2019
4th Payment 500000 09-05-2019
5th Payment 3500000 05-11-2019
PW using XNPV function 4976034.72

Showing formula in excel

interest 0.075
initial investment 0 10-11-2018
1st Payment 250000 =C13+15
2nd Payment 500000 =C13+60
3rd Payment 500000 =C13+90
4th Payment 500000 =C13+180
5th Payment 3500000 =C13+360
PW using XNPV function =XNPV(B12,B13:B18,C13:C18)
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT